BIPA does not include tax dispute: Inter-ministerial Group

The inter-ministerial group on Vodafone has reached consensus on the matter that BIPA does not include tax disputes, reports Aakansha Sethi of CNBC-TV18.

A group comprising of finance secretary, telecom secretary, MEA secretary and the law secretary as a whole is certain on the fact that the BIPA does not cover tax issues and hence the letter sent by Vodafone to both the Prime Minister and the finance minister is not valid since the BIPA doesn’t cover it.
Secondly, they say that Clause 4 of BIPA makes it very clear that only investment is covered under BIPA and since there was no investment that came in from the Netherlands. This is again a notice that is invalid and also the fact that the investment came in via 20 subsidiaries and not from the Netherlands and hence there is no need for the India’s BIPA with the Netherlands to be invoked in such a case. Now, the IMG will meet again next week to finalise its reply and over the next two weeks you should expect this reply being sent back to Vodafone.
What remains to be seen is what this will mean for the arbitration process. It needs to be three months where the BIPA provides the negotiations and if there is going to be a breakdown in negotiation. It will probably mean that Vodafone will invoke arbitration faster.
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