Speculations were rife of a breakthrough in the Vodafone tax issue today when Max India founder and Vodafone chairman Analjit Singh met Finance Minister P Chidambaram.
“I will not comment on the Vodafone issue. I came to meet the finance minister on matters other than Vodafone,” Singh told CNBC-TV18.
Vodafone’s negotiations with the finance ministry for settling the tax case is stuck on the issue of Rs 3,500 crore interest as the government is willing to waive the penalty provided the telecom firm pays the tax and interest. However, the telco is willing to pay tax if penalty and interest are waived.
The government can waive the penalty under Section 273A of the Income Tax Act, a CNBC-TV18 report said.
“Penalty is not due since the matter was before the Supreme Court,” sources privy to the matter in Vodafone said.
Sources in the government said that it is politically difficult to make retro amendment prospective and the retrospective amendment in Section 9 of the I-T Act will stay.
“The unintended consequences of Section 9 will be dealt with as per Parthasarathi Shome committee report,” government sources said.