Vodafone is ‘open’ to settling matter of retrospective tax with India: Report

Companies like Vodafone, Cairn and others will have to give an undertaking that they will not seek legal damages, recoup legal costs or file cases related to retrospective taxes against the government in the future. (Source: Reuters)

British telecom giant Vodafone Group is “open” to ending its decade-long dispute with the Indian government over retrospective tax on the transfer of assets, sources told The Economic Times.

This comes after the Centre this week scrapped the retrospective tax policy and Vodafone is likely to apply to the government after the framework for settlement is announced, sources told the paper.

Moneycontrol could not independently verify the report.

A spokesperson for Vodafone did not respond to queries, it added.

One source said Vodafone “would wholeheartedly accept this”, while another noted the company would consider “certain conditions and undertakings” the bill requires and have no difficulty complying “if these conditions are comfortable”, adding: “It is high time tax disputes are resolved.”

Rajya Sabha has approved the Tax Amendment bill on August 9. Finance Minister Nirmala Sitharaman on August 5 tabled the Taxation Laws Amendment Bill in Lok Sabha. The bill primarily looked to withdraw the contentious retrospective tax more than nine years after it came into force.

Sitharaman said that the demand raised for indirect transfer of Indian assets made before May 28, 2012, shall be nullified on fulfillment of specified conditions such as withdrawal or furnishing of undertaking for withdrawal of pending litigation and furnishing of an undertaking to the effect that no claim for cost, damages, interest, etc., shall be filed.

A top official told Moneycontrol that this means that apart from withdrawing cases, companies like Vodafone, Cairn, and others will have to give an undertaking that they will not seek legal damages, recoup legal costs, or file cases related to retrospective taxes against the government in the future.