Telecom Lead India: Vodafone Plc of the U.K. is facing Rs
20,000 crore tax demand in India following the controversial tax issue.
unjust as Hutch was the seller. Vodafone is studying the legislation and will
take steps to safeguard shareholders’ interests.
India and internationally, the government has not seen fit to propose
amendments to address the uncertainty caused by retrospective tax
legislation,” said Vodafone in a statement.
The government’s tough stand is despite several rounds of
negotiations with the Vodafone CEO.
Vodafone CEO Vittorio Colao meets Indian finance minister
Recently, to solve the $2.2 billion tax issue, Vodafone
group CEO Vittorio Colao has met Indian finance minister Pranab Mukherjee.
Vodafone is seeking reconsideration of the move to
retrospectively amend laws that will have a tax implication of Rs 11,000 crore
on the mobile firm.
prospect of paying nearly three times the initial tax demand of Rs 7,900 crore
after the government retrospectively changed the law allowing it to tax
indirect transfers of Indian assets through deals struck overseas.
asking it to Rs 7,900 crore as it did not withhold that amount while purchasing
the Indian telecom assets of Hutchison, a penalty of an equal amount and
interest of close to Rs 4,000 crore on the original tax.
proceedings. The total liability is about Rs 20,000 crore,” said a senior
finance ministry official.
passed five years after the event, Vodafone were to be charged tax on a gain
made by someone else, especially where the Supreme Court unambiguously ruled
that no tax was payable in India according to the laws of India in force in
finance ministry official said the government was not contemplating
negotiations with Vodafone to arrive at an out-of-court settlement.