Govt not to coerce Vodafone, Cairn on retro tax case: FM

  • PTI, New Delhi
  • Updated: Mar 28, 2016 10:48 IST
India's Finance Minister Arun Jaitley says the government will not coerce companies like Vodafone and Cairn Energy to settle their tax case. (HT Archive)

The government will not “coerce” companies like Vodafone Group and Cairn Energy to avail of its one-time offer to settle their retrospective tax cases and it was for them to take a call on it, Finance Minister Arun Jaitley said on Sunday.

The option before such companies was either to accept the offer of paying principal tax amount and get waiver from interest and penalty, or continue litigation, he said during an interaction with journalists at the PTI office here.

“This is an alternate route which I have suggested. The option is theirs. Nobody is being coerced to accept one route or the other,” he said.

The government, he said, has no issues with companies not wanting to accept the offer and continue litigation. “If they want to continue with the litigation, so be it... the outcome of the litigation will determine (the fate of tax demand).”

Asked about the tax notices sent to Vodafone and Cairn last month despite the issue being under arbitration and government commitment not to create fresh demand using retrospective tax law, Jaitley said notice would go if there are pre-existing assessment orders.

“You must accept one thing. That if there are pre- existing assessment orders in existence, obviously notices will go for those, unless those notices are stayed or stuck down.

“And if the concerned officer doesn’t even issue the notice, tomorrow some CAG or CBI will ask him why did he keep sitting on the file? Sending notices and enforcement of notice are two different things,” he said.

UK oil explorer Cairn Energy is facing a tax demand of Rs 10,247 crore on alleged capital gains made in a 2006 business reorganisation it carried out in its India unit before getting it listed. The total tax due after including interest comes over Rs 29,000 crore.

British telecom giant Vodafone is also facing a total of Rs 14,200 crore in tax, interest and penalty over its USD 11-billion acquisition of 67 per cent stake in the mobile- phone business owned by Hutchison Whampoa in 2007.

Both the firms have disputed any tax was due and challenged the demands by initiating international arbitration.

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