 "Partial tax waiver? Govt moves to settle Vodafone dispute")
India non-executive Chairman Analjit Singh on Wednesday met senior Finance Ministry officials on the Rs 11,217 crore tax liability issue related to the British firm’s acquisition of Indian telecom assets of Hutchison Whampoa.
“We have said consistently that we are ready to resolve the Vodafone tax dispute,” Singh told reporters but did not provide any detail when asked if a resolution was in sight.
“Since we met last time, there has been no nitty-gritty like this that has been discussed… We can’t speak to one aspect, we have to see the total package,” he said on media reports that the case could be settled on partial tax waiver.
According to a report in the Economic Times, the tax department can waive interest and penalty amounting to Rs 12,000 crore if Vodafone agrees to pay Rs 8,000 crore as basic tax.However, Vodafone has indicated that it wants the tax liability lowered.
[caption id=“attachment_826053” align=“alignright” width=“380”]  Reuters[/caption]
The Income Tax Department had issued a letter in January to Vodafone International Holdings BV stating that the company is required to pay tax demand of about Rs 11,217 crore along with interest.
However, Vodafone replied back saying that they do not owe anything to the Indian government.
Vodafone earlier wanted to take India to international arbitration but later offered conciliation on the issue.
Recently, Finance Minister P Chidambaram had said the Union Cabinet will take a final call on settlement of the Vodafone tax case. According to sources, the Cabinet will take a view on the offer of conciliation on June 4.
Impact Shorts
More ShortsUK-based Vodafone had been slapped with an income tax demand notice of over Rs 11,200 crore on its 2007 acquisition of Hong Kong-based Hutchison Whampoa’s stake in its Indian telecom business.
The liability arose following the then Finance Minister Pranab Mukherjee amending the Income Tax Act, 1961 with retrospective effect to undo the Supreme Court judgement that had ruled in favour of the company.
With inputs from PTI
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