Retrospective tax in the land of law unbelievable: Goldman CEO

Mumbai: Lloyd Blankfein, chairman and CEO of Goldman Sachs, the world's largest investment bank, has said it is "unbelievable" that India could introduce a tax legislation that would apply with retrospective effect. The move would undermine the country's image as a place where the rule of law applied, he said on Thursday. 

    Interacting with the who's who of India Inc at a luncheon meeting in Mumbai, Blankfein expressed surprise at the budget proposal to introduce a tax on offshore transactions with retrospective effect, according to those present in the meeting. He indicated that the move could spook investors who were positive on India's growth story. 

    Blankfein's is the most serious voice yet to oppose the proposal that has met with widespread criticism. 

Voda won't face tax issues, PM told Brown P rime Minister Manmohan Singh had assured his UK counterpart Gordon Brown in 2010 that Vodafone would have protection under the Indian law in its Hutch deal and courts had affirmed that there would be no retrospective application of taxation. P 21 'Keen to pursue growth in India' 

Mumbai: Goldman Sachs chairman and CEO Lloyd Blankfein on Thursday warned that the proposal to tax offshore deals with retrospective effect would put off potential investors. Those present at the luncheon meeting with him included Tata Group chairmandesignate Cyrus Mistry, businessmen such as Prashant Ruia and Adi Godrej, bank CEOs like Chanda Kochhar of ICICI and Shikha Sharma of 

Axis, and Infosys chairman KV Kamath. 

    Finance minister Pranab Mukherjee in his Union Budget earlier this month proposed amendments that allow taxmen to raise claims on overseas transactions involving Indian assets with retrospective effect. Among other deals, the amendment was aimed at recovering $2.2 billion withholding tax from Vodafone on payment made to Hutchison Whampoa for acquisition of the latter's mobile telephone business in India. This sent jitters across global corporations, investors and dealmakers who argue the move would jeopardize India's investment climate. The board of Blankfein-led Goldman Sachs was in Mumbai for its first-ever annual meeting in India. After the meeting, board members met industry leaders for a sense of the economy. Speaking on the situation in the US, Blankfein said a recovery was underway; the Fed and government would need to focus on ensuring that the recovery is sustainable. 

    Later, at a dinner that was attended by such leading lights of India Inc as Rahul Bajaj and Sajjan Jindal, Blankfein said Goldman was interested in pursuing and promoting growth in high-potential markets such as India.

Lloyd Blankfein