 "Union Minister for Finance, Corporate Affairs and Information & Broadcasting, Arun Jaitley shakes hand with Vodafone Group CEO Vittorio Colao during a meeting in New Delhi")
The finance ministry has not ruled out a settlement of the Rs 20,000-crore tax dispute with telecom multinational Vodafone.
The dispute, for which the government amended the Income Tax Act in 2012, is to be heard in an arbitration panel but the two sides are yet to agree on a neutral presiding arbitrator.
“During the course of arbitration, if Vodafone wants to opt for a settlement, we will consider that,” said a ministry official.
The issue was raised by Vodafone Group chief executive Vittorio Colao during his recent meeting here with Finance Minister Arun Jaitley.
Vodafone had taken the government to international arbitration and invoked the Netherlands-India bilateral investment protection treaty, following the government’s move to tax the company.
Colao's visit came amid speculation that all tax demands raised with retrospective effect, including that of Vodafone, might be referred to a judicial commission for an early decision. The government has already assured investors that any case that would lead to a new liability arising out of retrospective amendments to the I-T Act would be monitored by a panel of the Central Board of Direct Taxes.
The government amended the law after the Supreme Court had ruled in favour of Vodafone and observed the
I-T department did not have the authority to tax the company in a deal abroad. The case related to Vodafone buying Hutchison's India assets for $11 billion.
Colao had also raised the issue of a recent high court order in a separate case. The court had ruled in favour of Vodafone over a Rs 8,500-crore case. The CEO wanted to know from the finance minister whether the government would appeal against it.
Earlier, the government had decided not to challenge the Bombay High Court ruling in favour of Vodafone in a separate case of transfer of shares within the group companies.
