In a letter to the finance ministry, Vodafone has suggested that an early resolution to the tax issues will help its subsidiary focus on expansion plans, a senior official in the telecom ministry said. Contents of the letter also reflect the conciliatory approach the company recently indicated to end the tax issues, sources added.
“It is good for the telecom sector but it would be difficult for the finance minister to fast track both cases simultaneously, as has been requested by Vodafone Plc. Importantly, the request reiterates the company’s commitment to pump resources in India,” sources said.
Last week, Vodafone received a breather from the Income Tax Appellate Tribunal, that has given a stay in the Rs. 3,700-crore tax demand on a transfer-pricing case against its Indian arm Vodafone India Services Private Ltd (VISPL).
Industry observers view the proactive approach for conciliation a response to a decision taken early this week by the Foreign Investment Promotion Board (FIPB) that approved Vodafone’s plans to take full ownership control in its subsidiary by buying out its minority partners in a estimated Rs. 10,141-crore deal.
“We are not commenting on the tax matter,” Ben Padovan, group head of media, external affairs, Vodafone Group Services Limited, told HT in an email.