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Learning objectives are as follows: Analyze the reasons for the implementation of retrospective taxation by the Government of India; infer the dynamics of international tax laws and the settlement process of international taxation disputes; critically analyze the factors that led to the Indian Government’s decision to scrap the retrospective tax; and infer the relationship between a country’s taxation system and its potential to attract foreign direct investment.

This case is an analysis of the Indian Government’s decision to scrap the retrospective taxation amendment. The case discusses the underlying factors that led the incumbent government to take this sudden decision. The case discusses in detail the causes for the introduction of the retrospective taxation amendment and the tax terror unleashed by this draconian law. The case also discusses the embarrassment faced by the Indian Government because of a series of adverse decisions against it and in favor of Cairn Energy and Vodafone in the international courts. It also discusses the adverse effect on Indian banks in case of ailing telecom conglomerate Vodafone Idea Ltd failure.

The case is best suited for postgraduate and executive students studying Taxation subjects in Commerce and Business Management streams.

Teaching notes are available for educators only.

CSS 1: Accounting and Finance.

This case study draws on interviews conducted with officials from the Rhode Island Department of Environmental Management (DEM), City of Woonsocket and Town of North Smithfield. Additionally, it pulls from relevant legal documents, recordings and minutes from meetings of the Woonsocket City Council and North Smithfield Town Council, City Council resolutions, state legislation and local press coverage.

From 2012–2017, the communities of Woonsocket and North Smithfield engaged in a protracted dispute concerning wastewater disposal. For 30 years, the two jurisdictions had maintained a signed service agreement. Following its expiration; however, Woonsocket imposed a new host fee on North Smithfield. Woonsocket needed to upgrade the facility to comply with mandates from the RI DEM. Over the next five years, leaders from both jurisdictions vociferously fought over the new fee. At the same time, leaders within communities experienced their own divisions. This case study highlights the challenges that decision-makers faced in both communities.

This case is appropriate for graduate and executive level courses in environmental policy, communication and leadership.

Business environment, international business management.

The case is suitable for students of the business environment, and of international business management.

The case revolves around the reaction of the Finance Ministry of India on Vodafone's tax case and its implications on FDI and the foreign investors who are investing in India. The core issue is the political risk(s) faced by Vodafone even after having won the tax case in the Supreme Court, the highest judiciary body in India. The Government of India has amended the law to bring the tax into retrospective mode and it signifies the impact of political decisions on business organizations.

The case can aid in understanding the effects of changes in a political system and legal framework on the efficacy of business entities; and the importance of, and intricacies involved in, the formulation of political risk mitigating strategies while entering into new markets. The key learning outcomes are: understanding various types of political risks faced by multinationals; assessing the political risks involved in foreign investments; and appreciating the possible mitigating strategies to handle such risks.

Teaching notes are available, please consult your librarian for access.