Further to our newsflash dealing with notification dated 14 December 2016 (Rescission Notification) issued by the Central Board of Direct Taxes (CBDT) rescinding its earlier notification dated 1 November 2013 which had notified Cyprus as a ‘non co-operative jurisdiction’ (Notification), the CBDT has now issued an addendum to the Rescission Notification.
The effect of the addendum [Notification No. 119/2016/F. No. 500/02/2015-FT & TR-III] to the Rescission Notification is that the Notification would be rescinded retrospectively from its date of its issue i.e. 1 November 2013. There is one exception to the retrospective effect of rescission, i.e., any act or omission done in pursuance of the Notification prior to 14 December 2016, would not be impacted.
This brings much anticipated clarity and is in line with what was expressed in the press release issued by the CBDT on 1 July 2016, whereby India was to consider rescinding the Notification with retrospective effect from 1 November 2013. The exception carved out for acts already done pursuant to the earlier notification could be to ensure that the position adopted in past transactions would not be unsettled.