The Indian government has finally nullified the most controversial decision of charging retro tax which has created big ruckus in taxation field mostly concerned with companies based in foreign countries and operating business in India. The entire wrong, absurd and illogical decision was taken by Congress government in 2012 under the prime minister ship of Manmohan Singh. As it is told frequently, Manmohan was not able to do much as all the decisions were being taken and implemented by late Pranab Mukharjee, the then finance minister under the leadership of Sonia Gandhi. The decision cost extreme dearly for one of telephone giant company Vodafone which was later entered into partnership with Kumar Mangalam Birla’s Idea. But, the retro tax regime broke the neck of Vodafone-Idea or VI which is reeling under the loan of more than one lakh crore rupees. Kairns and Vodafone are the companies that hit by the decision of retro tax very badly. Meanwhile, Congress government was dragged out of power by voters and Modi government came to existence. As Modi had assured to nullify this draconian and equally laughable decision before elections in 2014. But, the decision caused a arrears amounting to more than 32 thousand crores of rupees from the two companies. So, the greed of government stopped Modi government from cancelling the provision and the provision remained as it is. Now question arises, suddenly why government decided to cancel the provision of retro tax? The answer lies in winning of litigation by Kairns and embarrassment to Modi government caused by the court ruling. Modi is still considered as industry friendly leader and had he cancelled the provision of retro tax immediately, it would have been better for his image and for the industry also. But, facing tremendous economic disaster due to recession, note ban and now Covid-19, Modi did not remove the temptation to get so much money. But, fortunately Kairns company while leaving its operations in India, went to international tribunal to confiscate India’s international assets and the tribunal gave ruling favourable to the company. As a result, Indian government faced extreme embarrassment in international community and various courts also passed verdicts against the retro tax. The government lost his face in all this completely and now there was no other option for it to cancel the provision. Birla also jumped in the controversy and stepped down due to company’s financial distress. Modi government has lost all its image and goodwill as industry friendly dispensation in this retro tax provision. It was a great opportunity for Modi government to correct the wrong doing by Manmohan government but the greed of collecting 32 thousand crores rupees stopped it to do so. The real loss due to this provision was the jobs of employees lost and this was more detrimental to Indian economy. Lakhs of Vodafone and Idea employees are in danger of losing their livelihood which will affect the Indian economy which is already in doldrums. This is not prestige point for anybody concerned. If the government does not intervene in the Birla matter, the already sky high unemployment will be added by significant number. The government should not take revenge against Vodafone and Idea and help them to stand firmly in the market once again. Otherwise, it will be a great loss to the consumers as if VI will go out of market, the monopoly of Jio and Bharti Airtel or Airtel will be established in the market. For the benefit of consumers, it is very necessary to prop up VI. For the time being, the cancellation of retro tax is big relief for companies such as Vodafone and Idea.