Tax row: FinMin questions Vodafone‘s move to invoke BIPA

Finance ministry sources have questioned Vodafone's move to invoke the bilateral investment & protection agreement (BIPA), reports CNBC-TV18's Aakanksha Sethi quoting sources.

Sources in the finance ministry say that they do not understand why Vodafone has invoked a bilateral investment treaty, when in fact Vodafone did not make any investment in India. The shares that it brought in Hutch-Essar, the payment for the shares was made in Cayman Island.
All the money that was paid went to Cayman Islands and there was no FDI that came into India. So, when there is no investment then why BIPA should be invoked? and if anything have to be invoked, it should been a double taxation avoidance agreement (DTAA) and India does not have an arbitration clause in any of it’s DTAAs.
The government is very firm on it's stance that it does not wants to withdraw the retrospective amendment. The final word will come in from the finance minister on what stand the government will take, but as of now the government is not looking very keen on resolving this matter through negotiation. Also watch the accompanying video.