"We have replied to Vodafone that there is no cause of action because no law has been amended ... There is no cause of action. It is premature on behalf of Vodafone," a top finance ministry official said.
The Dutch subsidiary of Vodafone had last month served a notice on the Indian government invoking BIPA between India and the Netherlands and threatened international arbitration in the tax case.
The government then set up the IMG to firm up India's respond to the notice given by the telecom giant in the tax case. The group, which is headed by Finance Secretary R S Gujral, include representatives of ministries of external affairs, telecom, law and revenue.
The finance ministry officials had then said that tax dispute does not come under the purview of Bilateral Investment Protection Agreement (BIPA).
"Taxation does not come under BIPA. Money for deal came from over 20 companies (which are subsidiaries of Vodafone)," finance ministry officials had said.
The issue pertains to the amendment in Income Tax Act with retrospective effect, which would bring Vodafone-type deals under the tax net.
The amendments to the I-T Act, which were approved by Parliament, would neutralise the victory of Vodafone in the tax case and the company, according to estimates, would be liable to pay about Rs 20,300 crore as tax, penalty and interest. MORE
