NEW DELHI: Vodafone will not accept the government’s offer for a one-time settlement of its pending tax case and press on with the ongoing arbitration case.
Arun Jaitley in his budget for 2016-17 has proposed a dispute resolution scheme for settling pending cases of retrospective taxes. Under the proposal, interest and penalty would be waived off for settling the tax by paying only the principal amount.
This deal was worth $11 billion (almost Rs 50,000 crore at that time) and the entire tax liability with the principal, interest and penalty is over Rs 20,000 crore. But under the government’s resolution mechanism, Vodafone would have to pay only the principal of Rs 7,990 crore.
Top sources in the finance ministry say that despite the on-time offer, Vodafone is unlikely to take the settlement route as the company’s shareholders have voted against the move.
“The shareholders believe that they will win the arbitration filed in the international court since the Supreme Court of India ruled in Vodafone’s favour,” said a finance ministry official.
In 2012, the Supreme Court had ruled in Vodafone’s favour saying that it did not owe capital gains tax to India. Sources say that the company’s shareholders feel that it is against the spirit of justice when a country overrules a verdict from its own apex court.
Vodafone Plc refused to comment on mails sent by HT.
“We have tried the reconciliation route, we have also given them the option of a one-time settlement but Vodafone is not interested,” said an official in finance ministry.