Vodafone Plc said that it will continue the process of international arbitration against the Government on the multi-million dollar tax dispute.

“We note the Finance Minister’s announcement that existing cases arising from the 2012 retrospective tax law should follow the lawful process in which they are currently being adjudicated. Vodafone will therefore continue the process of international arbitration initiated under the India-Netherlands Bilateral Investment Treaty,” Vodafone said after the Finance Minister’s Budget speech.

Default rights

The Finance Minister said that the sovereign right of the Government to undertake retrospective legislation is unquestionable.

“At this juncture I would like to convey that we are committed to provide a stable and predictable taxation regime that would be investor friendly and spur growth. Keeping this in mind, we have decided that henceforth, all fresh cases arising out of the retrospective amendments of 2012 in respect of indirect transfers and coming to the notice of the Assessing Officers will be scrutinized by a High Level Committee to be constituted by the CBDT before any action is initiated in such cases.” Arun Jaitley said.

Same stance

Vodafone said that it has maintained that there was no tax to pay, a view upheld by India’s Supreme Court, and the retrospective law in any case concerned tax on the gain made by Hutchison: Vodafone, as the buyer, clearly made no capital gain whatsoever.

“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,” Vodafone said.