Impact of axing retrospective tax

The retrospective amendments that sought to tax capital gains made by non-residents on sale of foreign companies with underlying Indian assets were always controversial. Disputes continued to rage over their validity and scope since their introduction. More recently, two arbitral awards were issued under India’s BITs that ruled the amendments to be violative of India’s obligation to provide fair and equitable treatment to foreign investors. This led to steps being taken to enforce the arbitration award against some of India’s assets overseas.