May 29, 2013, 06.47 PM IST
The Cabinet will be discussing the Vodafone taxation issue on June 4. A partial interest waiver too is on the cabinet note's agenda.
The Vodafone taxation issue is likely to be discussed by the Cabinet on June 4. CNBC-TV18's Aakansha Sethi learns from finance ministry sources that a Cabinet note on the matter seeking a nod for conciliation with the telecom giant will be prepared.
However, the Cabinet approval is just one step towards settling the matter. A lot of work will be needed to done before for an actual settlement can be achieved, which will be followed by the I-T Act amendment. After that it will be taken up by the Parliament.
So far the government has been okay with the interest penalty wavier, though not a complete interest wavier. Legally, it cannot refund the entire interest amount but it is keen on an interest and penalty wavier.
Vodafone, on the other hand, only wants to pay between Rs 2,000-2,500 crore as tax amount. The entire tax amount is Rs 8,000 crore. Sources say a partial tax wavier too maybe considered.
But whatever will be decided would be applicable not just to Vodafone but to all companies. So, there are two ways the government can go about it. 1) Say that all companies impacted by the clarificatory retrospective amendment will see a tax wavier.
But in that case there will be a question mark legally over the constitutional validity of the clarificatory retrospective amendment. This is because the government had said that it was only a clarificatory amendment and the purpose of it was not to increase the tax base.
2) All companies, that have a favourable Supreme Court judgement, might then see a wavier of the interest and penalty amount or a partial tax wavier. So, in that case Vodafone would get the benefit.
Below is the edited transcript of Analjit Singh, chairman, Vodafone India comments after having met the Finance Minister.
Q: Has the government got in touch with Vodafone?
Q: But you are ready to sit across the table for conciliation?
A: We have said that consistently. We are always ready to sit with the government.
Q: Are you hopeful of the fact that a settlement will now be reached?
A: What can I say?
Q: Up till now the clincher was to be the interest amount. Is there any discussion on whether you are willing to pay the entire tax amount?
A: Since we met last there has been no nitty-gritty like that discussed.
Q: Are you willing to pay the entire tax amount?
A: We will see depending on what comes with or without it. We can't stick to one aspect; we have to se the total package.
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