British telecom major Vodafone made the first move on Tuesday to resolve the tax tiff with the Indian government.
Vodafone CEO Vittorio Colao met finance minister Pranab Mukherjee to reportedly seek a partial waiver of the $2.1-billion (R11,200- crore) retrospective tax that it may have to pay once a new tax law comes into force later this month.
“We just presented our case to the finance minister,” Colao told reporters after the meeting. An industry source told HT that the British firm was open to negotiations on a settlement on the tax dispute Vodafone had been in a five-year court battle with the government over the Rs. 11,200-crore tax demand, with the government arguing that the British firm had concluded the Hutchison deal abroad — Cayman Islands – to evade taxes.
In January, the Supreme Court had ruled that the firm was not liable to pay any taxes under prevailing laws. Later, the finance ministry proposed changes in India’s tax laws to impose a retrospective provision on some international mergers that might include Vodafone’s 2007 acquisition of Hutchinson’s mobile phone business in India.
Max India chairman Analjit Singh, who is non-executive chairman of Vodafone India, accompanied Colao during the hour-long meeting with Mukherjee and finance secretary RS Gujral. Last week, Singh met the finance secretary and is understood to have discussed the implications of the “retrospective” tax provision on Vodafone’s investments in India.