- The issue was discussed at a recent meeting where Prime Minister Narendra Modi was present.
- The arbitration award to Vodafone by the Hague-based Permanent Court of Arbitration (PCA).
- While there is a strong view within the administration that the award should be challenged at the Singapore-based appellate tribunal.
- The government has time till December-end to appeal against the award
- Some experts – India should not appeal – it would send a positive signal to foreign investors
- Solicitor General Tushar Mehta has backed an appeal against the award.
- New Delhi’s position is that taxation is a sovereign right that cannot be challenged under bilateral investment treaties.
- In his first budget speech in July 2014, then finance minister Arun Jaitley had said while the government had the right to undertake retrospective legislation, it had to be exercised with extreme caution.
- The Vodafone tax dispute has been festering since 2012 when finance minister Pranab Mukherjee amended income tax rules to nullify a Supreme Court ruling in favour of the telecom company.
- The ‘retrospective amendment’ made Vodafone liable to pay a total of ₹20,000 crore, including penalties to the tax authorities.
SEBI – new framework to enhance scrutiny
- Stock exchanges could soon get access to bank account details of brokerages.
- SEBI is working with banks to design a new framework that will allow bourses to examine such data, including transaction history and details of any suspicious activity.
- The move is aimed at enhancing stock exchange scrutiny of brokers and comes as regulators and bourses have drawn criticism for the late detection of alleged acts of wrongdoing, such as those involving Karvy Securities and Anugrah Broking.
- Under the framework, all brokerages will be asked to sign consent forms giving exchanges permission to obtain the transaction data from banks.
- Leading banks too have given their in-principle approval for such a framework.
- Two years ago, brokers had access to the securities of their clients and surplus funds in their accounts.
- Brokerages no longer have direct access to either surplus funds or securities of clients.