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Finance Minister Arun Jaitley<\/a> offered an olive branch to Vodafone<\/a> to end India’s most high-profile tax dispute in the Budget but the British telecom giant was noncommittal in its response.\n
Tax experts said the company was unlikely to accept the proposal. The proposal relates to companies facing retrospective tax<\/a> demands.
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\nThe government has offered to waive interest and penalty if the company pays the original tax demand. If Vodafone<\/a> accepts the offer, it will end the Rs 20,000 crore row that started in 2008.
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“We will of course study the detail of what the finance minister has proposed today, while continuing to seek resolution<\/a> of this matter through international arbitration,” the company said in a release.
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\n“Vodafone has always maintained that there was no tax to pay at the time it completed its acquisition of Hutchison’s business in 2007. This view was upheld unanimously by the Supreme Court of India in January 2012.”
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\nAs the acquirer, the company had made no capital gains, it said. “Given the clarity of the Indian law in force in 2007, there was no legal basis to withhold tax,” it said.
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\nThe government move may not get much of a welcome, experts said. The offer “is unlikely to cut ice with foreign companies as they are disputing the retrospective levy of tax itself,” said Shefali Goradia, partner, BMR Advisors.
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\n“If the government recognises that retrospective tax<\/a> is bad for investor sentiment, it should have gone the extra mile and waived tax as well for past cases.”
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The government, which has pledged a nonadversarial tax regime, wants to close the chapter on retrospective taxation<\/a>, which it says has given the country a bad name among investors.
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\nAfterall, service providers benefited from India’s telecom policy that deliberately avoided upfront spectrum costs to aid the spread of mobile phones.
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\nThe high-volume, low-margin businesses created value for the telco, and the government is entitled to a share, say tax officials. A settlement with Vodafone will ensure the government does not give up its underlying right to tax capital gains on the value generated from economic activity here. Some experts said taxing the buyer wasn’t right.
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\n“Retrospective tax was illegal in the first place. In Vodafone’s case, the basic liability of capital gains tax was not its own,” said Nishith Desai, founder of Nishith Desai Associates.
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\n“It would be better to boldly withdraw retrospective tax and put the whole issue behind.” Besides Vodafone, there are close to a dozen cases on retrospective taxation<\/a>.
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\nThe details are different in each case. With Cairn, for example, the government has demanded capital gains tax on the transfer of assorted subsidiaries to a single unit in India. This took place prior to Cairn India’s initial public offer. Again, the company has contested the claim.
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\nThe government has also proposed a dispute resolution<\/a> scheme to settle other cases, unrelated to retrospective tax, amicably.
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\nIt will allow a company to pay 30% tax along with a penalty and surcharge of 7.5% each to settle the case, the liability working out to 45%.
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About 3 lakh cases are pending with Rs 5 lakh crore of demands tied up in litigation. A settlement will boost revenue, raise the tax to GDP<\/a> ratio and spur growth. \n<\/body>","next_sibling":[{"msid":51200650,"title":"Krishi Kalyan cess, charge on transfer of spectrum to make telecom services dear: COAI<\/b>","entity_type":"ARTICLE","link":"\/news\/krishi-kalyan-cess-charge-on-transfer-of-spectrum-to-make-telecom-services-dear-coai\/51200650","category_name":null,"category_name_seo":"telecomnews"}],"related_content":[],"msid":51203140,"entity_type":"ARTICLE","title":"Budget 2016: Vodafone lukewarm to FM Arun Jaitley\u2019s offering in tax dispute case","synopsis":"Tax experts said the company was unlikely to accept the proposal. The proposal relates to companies facing retrospective tax demands.","titleseo":"telecomnews\/budget-2016-vodafone-lukewarm-to-fm-arun-jaitleys-offering-in-tax-dispute-case","status":"ACTIVE","authors":[{"author_name":"Hema Ramakrishnan","author_link":"\/author\/37805712\/hema-ramakrishnan","author_image":"https:\/\/etimg.etb2bimg.com\/authorthumb\/37805712.cms?width=100&height=100&hostid=268","author_additional":{"thumbsize":false,"msid":37805712,"author_name":"Hema Ramakrishnan","author_seo_name":"hema-ramakrishnan","designation":"Editor","agency":false}}],"Alttitle":{"minfo":""},"artag":"ET Bureau","artdate":"2016-03-01 07:36:25","lastupd":"2016-03-01 07:38:17","breadcrumbTags":["Vodafone","industry","gdp","resolution","Arun Jaitley","Taxation","retrospective tax","Budget2016"],"secinfo":{"seolocation":"telecomnews\/budget-2016-vodafone-lukewarm-to-fm-arun-jaitleys-offering-in-tax-dispute-case"}}" data-authors="[" hema ramakrishnan"]" data-category-name="" data-category_id="" data-date="2016-03-01" data-index="article_1">
财政部长杰提供了一个橄榄枝沃达丰(Vodafone)结束印度最知名的税收争议的预算,但英国电信巨头未明确的回应。税务专家表示,该公司不太可能接受这个提议。建议相关企业面临回顾税的要求。
政府已经表示愿意放弃利息和罚款如果公司支付原税收需求。如果沃达丰(Vodafone)接受报价,它将结束20000卢比行,始于2008年。
“我们当然会研究财政部长所提出的细节今天,同时继续寻找决议通过国际仲裁的这件事,”该公司在一份新闻稿中说。
“沃达丰(Vodafone)一直坚称没有税收支付的时间完成2007年收购和记黄埔的业务。这个观点是由印度最高法院一致支持2012年1月。”
收购者,公司没有资本利得。“鉴于印度法律的明确性在2007年生效,没有法律依据征收预提税,”它说。
政府的举措可能不会得到太多的欢迎,专家说。提供“不太可能削减冰与外国公司和他们争论追溯征收的税收本身,“说Shefali Goradia,伙伴,基础代谢率的顾问。
“如果政府认识到回顾税对投资者情绪不好,应该已经额外英里和放弃税收对过去的情况。”
政府已承诺nonadversarial税制,想关闭一章回顾税收它说,在投资者中给这个国家带来了坏名声。
毕竟,印度电信服务提供商得益于政策刻意避免前期频谱援助成本手机的传播。
大容量,低利润的企业创造价值的电信,政府有权分享,说税务官员。解决与沃达丰将确保政府不放弃其潜在的资本利得税的权利产生的价值的经济活动。一些专家说对买方不正确。
“回顾税是非法的。在沃达丰的情况下,资本利得税的基本责任不是自己的,“Nishith德赛说,德赛Nishith Associates的创始人。
“最好是大胆地撤回回顾税,把整个问题。“除了沃达丰,有接近12个病例的回顾税收。
细节是不同的。凯恩,例如,政府已要求资本利得税的子公司转移到在印度一个单元。这发生在凯恩印度的首次公开发行。再次,公司有争议的索赔。
政府还提出了争议决议方案来解决其他情况下,回顾税收无关,友好。
它将允许一个公司支付30%的税以及一个点球和附加费7.5%解决情况下,工作责任到45%。
大约十万的情况下等待着5十万的卢比的要求联系在一起诉讼。解决将增加收入,提高税收国内生产总值比和刺激经济增长。
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