Rules Soon for Vodafone Retro Tax Settlement

India will soon notify a separate set of rules to facilitate settlement of its retrospective tax dispute with British telecom company Vodafone, a senior government official told ET.

Vodafone had faced validation of tax demand under Section 119 introduced in the Finance Act 2012, as distinct from the others, and hence, rules also have to be issued under a separate section to withdraw the tax demand, the official said.

“Rules would be notified soon,” the official said, adding that the broad template of the rules would be akin to the final set of norms issued for settlement mandating indemnity from the companies willing to settle.

Vodafone will have 45 days from the date of notification of these rules to approach the government for settlement.

In other retrospective cases including Cairn, the tax demands were issued after the 2012 amendment under Section 9 relating to indirect transfer of Indian assets. Vodafone dispute, on the other hand, had been going on and demand was validated under Section 119 after the controversial 2012 amendment.

Under this set of rules, too, Vodafone will have to furnish a declaration to the I-T department to indemnify the government and its affiliates against any further claim as also commit to not seek any damage while withdrawing all legal cases at various for a.

The CBDT had issued the final rules for the settlement of the retro cases on October 2, operationalizing the Taxation Laws Amendment Act passed in the monsoon session of Parliament.

New Delhi had challenged a verdict by the Permanent Court of Arbitration in The Hague in September 2020 in favour of Vodafone that ruled the company was entitled to the protection of its investments under the treaty and asked India to cease such breaches of the international treaty.

The tribunal directed India to reimburse 4.3 million along with 3,000 as legal costs. The government’s liability totaled Rs. 85 crores, of which Rs. 45 crores collected toward the tax levy was to be refunded. S-ET

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *