Retro tax: Vodafone strikes to resolve dispute

British telecom main Vodafone Group has filed an utility with the Indian tax authorities for settlement of the retrospective tax dispute, officers and the corporate said.
In an announcement on Friday, the corporate mentioned it has filed an utility and that it has “always been confident” that no tax is due on the corporate. “We can confirm we have filed an application. We have always been confident that no tax liability arose in respect of our acquisition of the Indian business, and this was borne out by the decisions of the Supreme Court of India and the International Court of Arbitration,” it mentioned.
The authorities had in August introduced in The Taxation Laws (Amendment) Act 2021 stating that no tax demand shall be raised for any oblique switch of Indian property if the transaction was undertaken earlier than May 28, 2012.
The authorities had in 2012 retrospectively amended the Income-tax Act. This was in response to a Supreme Court verdict, which had held that Vodafone can’t be taxed for a 2007 transaction that concerned its buy of a 67 per cent stake in Hutchison Whampoa for $11 billion. Later in 2014, the federal government once more used the identical part to lift tax demand towards Cairn Energy Plc for restructuring finished in 2006.

On October 13, the Finance Ministry had notified guidelines to facilitate settlement of the retrospective tax dispute with such firms. The ‘Relaxation of Validation (Section 119 of the Finance Act, 2012) Rules, 2021’, prescribed the varieties and circumstances for the declaration to be filed by the corporate for settling its case. Vodafone had 45 days to method the federal government for a settlement, a timeline resulted in November.
With this, as many as 15 firms towards whom retrospective tax calls for had been raised have approached the federal government to settle circumstances.