India scraps ‘tax terrorism’ rule that spooked foreign firms

NEW DELHI: Indian lawmakers approved Friday the scrapping of a tax rule that allowed huge retroactive claims, badly hurt its image for foreign investors, and led to embarrassing attempted asset seizures from Paris to New York.

The 2012 legislation, which the then-opposition — now in power — dubbed “tax terrorism”, sought to claw back billions of dollars from foreign firms from past deals that involved Indian assets.

This reportedly included the 2013 acquisition of Foster’s India by brewing giant SAB Miller and the purchase of an Indian vaccine maker by French drug group Sanofi.

Two firms, Britain’s Vodafone and Cairn Energy, successfully challenged the tax claims in international arbitration courts — rulings that India refused to accept.