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India should not retrospectively tax assets - govt panel

NEW DELHI, Oct 9 (Reuters) - India should notretrospectively apply a controversial rule to tax assettransfers, a government panel said in a draft report,potentially providing relief to British mobile phone operatorVodafone .

The retrospective tax measure introduced this year waswidely seen as targeting Vodafone, after the government lost alegal battle to claim about $2 billion from the company relatedto its 2007 acquisition of Indian mobile phone assets.

The draft report, published on Tuesday, also said thegovernment should not levy any penalty interest in cases wheretax demands have been raised following the amendment of taxrules retrospectively in March.

The panel will receive public feedback on itsrecommendations before publishing a final report which willinfluence the government's decision on taxing Vodafone and othersimilar deals.

(Reporting by Rajesh Kumar Singh)

((rajeshkumar.singh@thomsonreuters.com)(+91-11-4178-1056)(Reute

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Keywords: INDIA TAX/