UK-based Vodafone Group Plc will consider settling the ongoing tax dispute with the Indian government if interest and penalties are waived, said Analjit Singh, non-executive chairman,Vodafone India Ltd.
The tax levy amounts to about Rs.8,000 crore, while interest and penalties make up another Rs.12,000 crore.
“It’s...an option. I don’t know if it’s viable,” Singh told news agencyPTI after meeting various officials of the tax department in New Delhi on Thursday.
Vodafonewas willing to discuss the tax issue with the government and did not want to get entangled in any controversy, Singh added.
“We have made our public position very clear that Vodafone is completely ready to discuss the matter,” he said. “Vodafone is not a company...(that is) confrontationist (or) controversial. This is not Vodafone’s business; its business is telecom.”
Earlier this week, in an interview to Bloomberg, Vodafone group chief financial officer Andy Halford said the company was considering making a provision to cover the legal risks emanating from the tax dispute.
The UK-based telecom firm said a final decision on this would be taken in November.
“We have been very clear in saying that no decision on any potential provision will be made until November,” the company said in an emailed statement on 17 September that reiterated Halford’s comments.
A spokesperson for the UK firm didn’t respond to a late evening email seeking comment on Singh’s statement.
In January, India’s top court ruled in favour of Vodafone in its case against the government over a demand for taxes stemming from the telco’s 2007 acquisition of Hutchison Whampoa Ltd’s Indian operations. In response, the Indian government amended a law retrospectively to tax cross-border transactions from 1 April 1962. The government, however, ordered the review a few days after Chidambaram took charge in August.
Halford said on 14 September that the company will pursue international arbitration if it’s found liable for the taxes even as the Indian government started making more conciliatory comments.
After P. Chidambaramwas reappointed finance minister in August, India softened its stance by asking a committee headed by Parthasarathi Shome to look into the retrospective amendments with regard to indirect transfers.
The government also has the option to waive the penalty and interest applicable to cases that will come under the tax net due to the retrospective amendments. Chidambaram said a few days after taking office that the tax department would not act rashly in the Vodafone case.
“Since the retrospective amendments are now a law, Vodafone will have to pay the taxes, unless the Supreme Court strikes down the amendment or the government decides to introduce changes in the law,” B.M. Singh, a former chairman of the Central Board of Direct Taxes, told Mint earlier this week.
“But the government does have the option of waiving the interest and penalty on all cases affected by the retrospective amendments by issuing a circular,” he said. “Even the Shome committee can only make recommendations. The government will have to go to Parliament to make changes to the Income-Tax Act.”
How the dispute ends will be determined by the Shome committee’s recommendations that will be announced by the end of this month. The retrospective amendment was announced by former finance minister Pranab Mukherjeein this year’s budget speechhttp://origin-www.livemint.com/Companies/9D3wib2FNfiwZrT7c6SXDJ/Paying-tax-is-a-viable-option-Vodafone.html
No comments:
Post a Comment