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NEW DELHI\/MUMBAI: Vodafone<\/a> Thursday said it will continue the process of international arbitration<\/a> initiated under the India-Netherlands Bilateral Investment Treaty to resolve the ongoing Rs 20,000-crore tax dispute against India, while a local tax official said the department will continue with its tax demand on the telecom major.\n
Earlier today, Finance Minister Arun Jailtey disappointed many investors as he retained the retrospective tax<\/a> amendment implemented in 2012 that most significantly impacted Vodafone<\/a> that had, just a few days ahead of the amendment, won the challenge against the taxman in Supreme Court.
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\nJaitley said that the ongoing disputes at various courts and “legal fora” will reach their natural conclusion.
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\nBroadly hinting at the ongoing Vodafone tax dispute, the finance minister said, “The Retrospective amendment of income tax act 1961 was undertaken by finance bill 2012, a few cases have come up in different courts and legal fora, these cases are at different stage of pendency and will naturally reach their logical conclusion.”
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\nIn a bid to assuage investor sentiment, he though added that the government will be extremely cautious in invoking the law which the investor community at large had panned, saying it hurt the country’s image as an investment destination.
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\nA government official said the tax demand on Vodafone continues, while the arbitration goes on.
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\nVodafone spokesman Ben Padovan said in an e-mail, “The notion of a retrospective withholding obligation is both unjust, and – as noted in the Shome Report – constitutes ‘imposition of a burden of impossibility of performance’.”
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\nThe Indian tax department has held Vodafone liable to withholding tax when it bought its Indian arm from Hutchison Whampoa in 2007.
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\nVodafone's counsel Anu Dutt was disappointed at the government’s decision not to scrap the amendment. Speaking to ET, she said, \"There was nobody opposing the scrapping of this legislation but despite the early signs given out, the government seems to have no political will to undo this\".
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\nFor cases which haven’t yet been looked at by the taxman under the retroactive amendment, Jaitley offered some leeway. “For future, it has been proposed that cases arising out of retro amendment 2012 in respect of indirect transfers and coming to the notice of assessing officers will be scrutinized by a high level committee of CBDT (Central Board of Direct Taxes) before any action is initiated in such cases”.
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\nHe hoped that the investor community both in India and abroad will participate in the country’s growth story with “renewed vigour”.
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\nET had earlier reported that the British giant was hopeful that the government would scrap the amendment.
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\nOwing to a stalemate in conciliation efforts between the company and India, Vodafone International Holdings BV, the Dutch entity, had slapped an arbitration notice under the Bilateral Investment Protection and Promotion Agreement between India and the Netherlands, following which the government withdrew its offer for conciliation.
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\nFormer Chief Justice of India RC Lahoti has been appointed the government's arbitrator, while Vodafone has named a Canadian trial lawyer, Yves Fortier, as its arbitrator.
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\nThe two parties need to appoint a third arbitrator through mutual consent by August 17.
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\nThe 2012 law amendment effectively overturned a Supreme Court judgment earlier that year. The court had accepted the British company's argument that it wasn't liable to pay tax in India over an $11 billion deal to buy the local operations of Hong Kong-based Hutchison in 2007 since the deal was between two companies based abroad. But the amendment with retroactive effect allowed local authorities to pursue their tax demand, which has reached Rs 20,000 crore including penalties and interest.
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\nAccording to taxmen, Vodafone should have deducted tax from the payment it made to Hutchison and paid to the government.\n\n<\/body>","next_sibling":[{"msid":38144985,"title":"Handset vendors likely to absorb marginal cost rise on education cess","entity_type":"ARTICLE","link":"\/news\/industry\/handset-vendors-likely-to-absorb-marginal-cost-rise-on-education-cess\/38144985","category_name":null,"category_name_seo":"industry"}],"related_content":[],"msid":38134236,"entity_type":"ARTICLE","title":"Vodafone to continue international arbitration; 2012 retro-tax amendment stays","synopsis":"Vodafone will continue the process of international arbitration initiated under the India-Netherlands Bilateral Investment Treaty to resolve the ongoing Rs 20,000-crore tax dispute against India","titleseo":"industry\/vodafone-to-continue-international-arbitration-2012-retro-tax-amendment-stays","status":"ACTIVE","authors":[],"Alttitle":{"minfo":""},"artag":"ET Bureau","artdate":"2014-07-11 05:21:14","lastupd":"2014-07-11 08:41:25","breadcrumbTags":["industry","Vodafone","retrospective tax","international arbitration","Telecom Budget 2014"],"secinfo":{"seolocation":"industry\/vodafone-to-continue-international-arbitration-2012-retro-tax-amendment-stays"}}" data-authors="[" "]" data-category-name="Industry" data-category_id="18" data-date="2014-07-11" data-index="article_1">
新德里和孟买:沃达丰(Vodafone)周四表示,它将继续的过程国际仲裁India-Netherlands下启动双边投资条约来解决目前价值20000卢比的税务争端对抗印度,而当地税务官员说美国将继续其税收对电信的主要需求。今天早些时候,财政部长阿伦Jailtey失望许多投资者保留了回顾税2012年修正案的实施,最重要的影响沃达丰(Vodafone),几天前的修正案,在最高法院赢得对税务部门的挑战。
杰说,持续的争端在不同的法院和“法律论坛”将达到自然的结论。
广泛的暗示的沃达丰税收争议,财政部长说,“回顾1961年所得税法修正案是由财政法案2012年,少数病例出现在不同的法院和法律论坛,这些悬而未决的情况下处于不同阶段,自然会达到他们的结论。”
为了缓和投资者的情绪,不过他补充说,政府将在调用非常谨慎的法律投资者团体的批评,说它伤害了这个国家作为投资目的地的形象。
一位政府官员说,税收对沃达丰的需求仍在继续,而仲裁。
沃达丰Ben Padovan发言人在一封电子邮件中说,“回顾扣缴义务的概念既不公正,和- Shome报告如上所构成的征收负担不可能表现的。”
印度税务部门举行了沃达丰可能预扣税的时候买了2007年印度手臂从和记黄埔。
沃达丰的顾问阿奴达特很失望在政府的决定不放弃这个修正案。等,她说,“没有人反对这项法案的废除,但尽管给出的早期迹象,政府似乎没有政治意愿取消这种“。
的情况下还没有被税务局看着追溯修正案,杰提供了一些余地。“未来,提出案例引起的复古修正案2012的间接转移来的注意评估人员将受到一个高级别委员会CBDT(中央委员会直接征税)发起的任何行动之前在这种情况下”。
他希望投资者团体在印度和国外都将参加中国增长故事“新的活力”。
等早前报道,英国巨头希望政府将取消这个修正案。
由于公司和印度之间的僵局在调解工作中,沃达丰(Vodafone)国际控股BV,荷兰的实体,在仲裁通知根据双边投资保护和促进协议之间的印度和荷兰政府撤回了收购后调解。
印度前首席大法官RC Lahoti被任命为政府的仲裁员,沃达丰已任命加拿大出庭律师,伊夫·福捷,作为仲裁员。
双方需要通过双方同意任命第三名仲裁员由8月17日。
2012年的法律修正案有效地推翻了此前最高法院判决。法院接受了英国公司的论点,这不是纳税责任在印度当地业务的110亿美元收购香港和记黄埔2007年以来,两家公司之间的协议是基于国外。但有追溯效力的修正案允许地方政府追求税收需求,达到了20000卢比包括罚款和利息。
根据税务官员,沃达丰应该从付款中扣除了和记黄埔和支付给政府。
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