Vodafone is angling for a Rs 7,900-crore relief in the tax case. Sources say Vodafone’s CEO Vittorio Colao will seek a waiver of the Rs 7,900-crore penalty from the government, thereby reducing the company's dues to the IT department by half. CNBC-TV18's Aakansha Sethi reports, quoting sources, why the decision came in so late and if the government was likely to consider the plea.
The government could consider waiving off the penalty under Section 273A of the I-T Act according to the discretionary power of the assessing officer. The waiver offers an opportunity for the resolution of the Vodafone’s dispute with the government.
Earlier, Vodafone had written to the finance minister and the Prime Minister requesting negotiation on the tax matter before the passage of the Finance Bill which will make effective the retrospective amendment.
Since the retrospective amendment has been made effective, Vodafone will either have to pay tax or invoke international arbitration. It will be beneficial for both parties to settle the dispute as international arbitration could take several years and could prove very costly for the government considering country’s fiscal situation.
Last week Analjit Singh, non-executive chairman, Vodafone India met finance secretary RS Gujral. Vodafone CEO Vittorio Colao is also likely to meet government officials shortly.
According to sources, Hutch wants to re-enter India and is keen for the dispute to be resolved as it could come under the tax department's scanner on fresh investments in India. In this context, Vodafone is now planning to negotiate and arrive at a settlement with the government. Also watch the accompanying video
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