Vodafone Group CEO Vittorio Colao is likely to meet finance minister P Chidambaram in the first week of December to discuss the telecom operator’s Rs 11,200 crore tax dispute.
PTI on Sunday reported that Colao is expected to meet the finance minister, who is also the head of empowered group of ministers (EGoM) of telecom, and several senior officials.
The high profile visit assumes significance because the telecom operator has expressed keenness to reach an amicable settlement on the tax issue. Vodafone offered to settle the dispute through conciliation to which government agreed, but there are differences over the rules under which it would take place, according to the report.
Vodafone is also expecting to receive FIPB (foreign investment promotion board) approval for its decision to increase stake in its Indian telecom venture to 100 percent by spending around $2 billion. Once it materializes, Vodafone will become the first foreign telecom operator to hold 100 percent stake in an Indian venture.
Also, telecom minister Kapil Sibal, who’s driving the telecom ministry, will be remembered for his major initiatives including 100 percent FDI in telecom. After the resignation of A Raja, who is alleged to have involved in the 2G scam, Sibal has tried to bring in the much needed transparency and other relevant measures to support the growth of the industry.
However, the Rs 11,200 crore tax dispute is still haunting the Indian government and the telecom ministry.
PTI report says while the British telecom major indicated its preference for conciliation under the United Nations Commission on International Trade Law (UNCITRAL), India proposed settlement under the Indian Arbitration and Conciliation Act.
Vodafone and the government are in pre-conciliation talks towards the settlement of long-pending tax dispute. While Vodafone has selected its senior official Mathew Kirk, the government has selected law Secretary P K Malhotra as its representative for the pre-conciliation talks.
The second largest mobile operator is also likely to look at merger and acquisition activities (M&A) in the Indian telecom market once the government finalizes new norms. It will also participate in the January 2014 spectrum auction which is a cash cow for the Indian government that is looking generating at around Rs 30,000 to Rs 40,000 crore.
