Economy

Apex court to hear Centre's review petition on Vodafone today

K. R. Srivats New Delhi | Updated on November 14, 2017 Published on March 19, 2012

Co to get Rs 2,500-cr refund

The Supreme Court will hear on Tuesday the review petition filed jointly by the Centre and the Income-Tax Department in the landmark Vodafone judgment.

Meanwhile, sources said that the Mumbai Income-Tax Department would refund Rs 2,500 crore along with Rs 118 crore interest to Vodafone by Tuesday.

The Tax Department is also considering a tax deduction (TDS) of Rs 50 crore on the amount, they added.

The review petition will be heard in the chambers of the Chief Justice Mr S.H. Kapadia, according to the Supreme Court Web site.

A review petition is usually taken up by the same bench that gave the ruling and is done without the presence of counsel.

The 266-page concurrent judgments — one by Chief Justice Mr S.H Kapadia and Mr Justice Swatenter Kumar and the other by Mr Justice Radhakrishnan — had irked the Government, which termed it ‘erroneous' and ‘contradictory' while seeking its total recall through a review petition filed on February 18.

The apex court had ruled that gains derived from transfer of shares of a foreign company cannot be taxed in India even if the value of such shares is substantially derived from assets located in India.

Applying this principle, it was held that payment made by Vodafone International to Hutchison's Cayman Island company outside India for acquiring the maze of companies holding the telecom business in India is not taxable in India.

To negate the Supreme Court's ruling on the Vodafone case, the Centre has proposed a slew of amendments in the Finance Bill 2012.

The proposed amendments are intended to clarify that the intent of the legislature was always to bring indirect transfer of shares to tax if substantial value is derived from assets located in India.

(with inputs from Rahul Wadke in Mumbai)

Published on March 19, 2012

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