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An inter-ministerial group (IMG) of the Government is likely to finalise, in its next meeting, the reply to the Vodafone's notice under the Bilateral Investment Protection Agreement (BIPA). The group's meeting on Friday was inconclusive.
A senior Government official said, “Though it is not an obligation on the part of the Government to reply to such a notice, we do not want anybody to raise questions. That is why we are readying our reply not just the 24 points raised in the notice, but some other issues too.”
Vodafone had given notice on framing of retrospective legislations. The Finance Bill, passed in the Lok Sabha earlier this week, has retrospectively amended the tax provision. Vodafone's tax liability under this is around Rs 20,000 crore.
The official also said that BIPA between India and the Netherlands does not have anything on tax. Secondly, the Government feels there is no dispute. If Vodafone thinks there is a dispute, it is not according to BIPA. Thirdly, “BIPA clearly says that if there is a dispute, it needs to be settled amicably and we are working on that,” he added.
The IMG, headed by the Finance and Revenue Secretary Mr R.S. Gujaral, is expected to focus on sections 4 and 5 of BIPA before finalising the draft reply.
shishir.s@thehindu.co.in
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