The battle between Vodafone and the government got fiercer again. Pranab Mukherjee said in the Parliament yesterday that despite the lobbying by the West, India will recover the tax from Vodafone which means Vodafone might have to legally challenge an imminent tax notice.
Now Vodafone Plc has responded via a press release saying they are disappointed with the government’s ways of not doing away with the uncertainty regarding retrospective taxation. It said it is studying the legislation and will do whatever it takes to guard shareholder value.
Vodafone said in a release, “It would be grossly unjust if, on the basis of legislation passed five years after the event, Vodafone were to be charged tax on a gain made by someone else, especially where the Indian Supreme Court unambiguously ruled that no tax was payable in India according to the laws of India in force in 2007.”
Vodafone said they have invested over Rs 50,000 crore in India and have still not taken any money out of the country. They have been one of the largest taxpayers here contributing Rs 29,000 crore to the exchequer in the last four years. They have created tens of thousands of jobs and will be committed to investment here.
Mukherjee had told the parliament yesterday that India cannot be treated as a tax haven. He said, “I would like to be guided either by a double tax avoidance agreement or domestic tax law. There cannot be a situation where somebody will make money on an asset located in India and will not pay tax either in India or to the country of its origin.”
Here is the full official statement from Vodafone Plc. :
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. We are studying the legislation as amended, and will take all possible steps to safeguard our shareholders’ interests. It would be grossly unjust if, on the basis of legislation passed five years after the event, Vodafone were to be charged tax on a gain made by someone else, especially where the Indian Supreme Court unambiguously ruled that no tax was payable in India according to the laws of India in force in 2007. Given this clarity, there was no legal basis for Vodafone to withhold tax.
We continue to be a very committed investor in India. Vodafone has created tens of thousands of jobs in India and our business helps underpin a distribution chain of over 1.4million small and micro businesses throughout the country. Since we entered the market in 2007, Vodafone has invested over INR 50,000 crores in our operations and we have connected 60 million rural Indian customers who are now able to communicate on our network. During the last four years, Vodafone also has been one of the larger taxpayers in India – with its Indian businesses paying over INR 29,000 crores into the Indian Exchequer. To underline our commitment for the long term, despite making considerable investments over the past five years, Vodafone has yet to take a single rupee out of the country.