VODAFONE CASE VICTORY OVER TDS | COURT AGREED TO PAY ONLY CASE COSTS | 2020

 VODAFONE CASE VICTORY OVER TDS 

British telecom giant Vodafone Group PLC has won the International Court of Arbitration for Retrospective Taxation. The Netherlands' International Arbitration Tribunal in The Hague has put a brake on the Indian government's attempt to collect Rs 22,100 crore in taxes from the Vodafone Group to apply retrospective (retrospective). The tribunal clarified that the Government of India's demand for payment of tax with old dates was completely contrary to the spirit of the Bilateral Investment Protection Agreement. It also said it was unreasonable to want to collect taxes from companies with such back dates. The tribunal also ordered the Indian government to pay Vodafone $ 54.7 million in case costs. However, government sources estimate that India will have to pay Rs 75 crore to Vodafone as per the tribunal's order.

FILED CASE:-

Vodafone bought a 67 per cent stake in Hutchison Equity, a telecom services provider in India, in 2007 for $ 1.1 billion. The Income Tax Department has issued notices to pay Rs 11,000 crore under TDS. Vodafone has increased the amount to Rs 22,100 crore with fines and interest for non-payment. In January 2012, the Supreme Court dismissed the IT department's demand. The central government has issued notices to amend the law to apply to Vodafone Group again with retrospective dates. Vodafone filed a complaint with the tribunal in 2014.

IMPACT ON OTHER CASES:-

A similar case is currently pending against international energy company Cairn Energy. Cairn Energy, a UK-based company, sold its stake in an oil field in Rajasthan to Vedanta Group in 2006. The IT department has issued notices to Cairn to pay Rs 10,247 crore capital gains tax on the profits from the sale. Cuern also challenged this in the tribunal.

WE WILL RECHECK ALL ELEMENTS AGAIN - CENTRAL:-

The Central Government has announced that it will scrutinize all possibilities in the Vodafone Arbitration case. The Finance Ministry said it would discuss the tribunal's verdict with its councils after a thorough review. The Government of India expects the tax refund to be limited to just Rs 75 crore. Of this, the government estimates that Rs 30 crore will be spent and Rs 45 crore will be tax refunded.