NEW DELHI: The government has challenged international tribunalthe decision holding him guilty of breaching provisions of an India-Netherlands bilateral investment treaty while making tax claims from telecom major Vodafone through an overview change of the law.
The government had 90 days to challenge the tribunal order and it is learned that they moved a court in Singapore earlier in the week, although it has not yet officially announced its position. . Spies for the ministry of finance and tax department did not comment on the case, while officials raised questions from the media.
On September 25, an international arbitration court rejected a claim for more than Rs 22,000 crore in taxes and penalties related to Vodafone ‘s acquisition of Hutch’ s controlling interest in India in 2007.
Five years later, after losing the case in the High Court, the government had changed the law in retrospect, in what it has maintained in its enlightenment. The companies he was involved in the affair on an argument that no payment was required as the agreement applied to overseas organizations. The government, however, believed that capital gains tax had to be paid in India as the country has the basic assets.
While Hutch was in charge, authorities decided to pursue Vodafone as they did not have access to the Hong Kong-based company’s assets and argued that the telecom company should take the fee. away before making the payment.
While some ministries were no longer keen to pursue the issue, the revenue department pushed for it, including with PM Narendra Modi, arguing that tax policy was a sovereign right and unacceptable. enforced by an investment protection contract or a settlement tribunal.
The Modi government has already been embroiled in double difficulties in defending the tax policy adopted by the UPA during Pranab Mukherjee’s term in the finance ministry, after being mismanaged in another joint case. related to a retrospective tax – Cairn Energy – where the income tax division went step. later in selling some of the shares. On Wednesday, a tribunal called on the government to pay $ 1.2 billion in addition to interest and expense for the British power company. The liability of the Center in the case of Vodafone is limited to Rs 85 crore in legal cost.
The government’s stance in the Vodafone case is also expected to resume in Cairn Energy as well although the finance ministry had said it was reviewing the order.