Income tax bill does not deal with international arbitration, will continue to fight: Devas
Devas Multimedia, a company seeking more than $ 1.2 billion that it won in an international arbitration from India, hailed India’s decision to quash retrospective corporate tax claims. However, the company stressed that the bill did not address the issue of upholding international arbitration awards and said it would continue to fight to uphold its legal rights.
âThe reports of the legislation, if they are true, are an encouraging sign that India intends to change course in its lousy treatment of investors. However, the bill does not address India’s refusal to honor international arbitral awards or bilateral investment treaties. We hope that will change, but until then, Devas shareholders will continue to uphold our legal rights in India and around the world for as long as it takes to achieve justice, âsaid Jay Newman, Senior Advisor, Devas. Shareholders.
The Lok Sabha passed the Tax Laws (Amendment) Bill 2021 on Friday, which seeks to withdraw tax demands made using retrospective legislation from 2012 to tax the indirect transfer of Indian assets. The bill provides for the withdrawal of the tax claim made on âthe indirect transfer of Indian assets if the transaction was made before May 28, 2012 (i.e. the day the retroactive tax legislation came into effect. force).
The new legislation will settle multi-billion dollar tax disputes and remove all overdue tax claims on companies like Cairn Energy and Vodafone. The government has also offered to reimburse the amount paid in litigation by the companies without any interest on it.
Devas and the Center are involved in several global court cases in which Devas demands prize money while India wants to liquidate the company and investigate suspected fraud. The problem dates back to 2005 over a failed satellite deal between Devas and ISRO-controlled Antrix Corp. Under the agreement, ISRO was to lease two communications satellites for 12 years at a cost of Rs 167 crore from Devas. The start-up was to provide video-audio services to mobile platforms in India using S-band spectrum repeaters on ISRO’s GSAT 6 and 6A satellites built at a cost of Rs 766 crore by ISRO.
An arbitration tribunal in 2020 awarded Devas more than $ 111 million plus interest. Devas also won $ 562.5 million in damages in separate proceedings before the International Chamber of Commerce.
Recently, Devas filed a petition in New York asking Air India to pay the amount or give up its US assets, including planes, cargo handling equipment, and artwork.