New Delhi: Tax authorities will issue a notice to British telecom major Vodafone for recovery of tax dues and penal interest soon after Finance Bill, 2012 receives Presidential assent.
Official sources said the notice under section 201 and 220 (2) of the I-T Act, which talks about simple interest at one and a half percent for every month the tax demand was raised, will also explain the retrospective amendment made by the government for taxing business deals that avoids tax in the country by showing them in a tax haven.
Vodafone had said in a statement on Wednesday, “We are naturally disappointed that, despite very widespread concern in India and internationally, the government has not seen fit to propose amendments to address the uncertainty caused by retrospective tax legislation.”
The Lok Sabha has approved the Finance Bill, 2012 which seeks to amend the Income Tax, 1961 with retrospective effect to tax overseas deals involving domestic assets.
The amendment would neutralise the victory secured by Vodafone in the Supreme Court in the Rs 11,000-crore tax dispute case.
The tax pertains to purchase of Hutchison’s stake in Hutchison-Essar by Vodafone for $11.2 billion in 2007 through a deal in Cayman Islands.
The tax liability of Vodafone, after taking into account the penalty and interest is estimated at Rs 20,300 crore.