MARKET UPDATE
| Vodafone representatives meet Revenue Secy, tax officials Tue, 15 Jan 2013 20:07:33 +0530 |
| Business Standard Economy Policy News Vodafone representatives today met top revenue officials in an attempt to resolve the Rs 11,200 crore tax liability issue relating to the British firm's acquisition of Indian assets of Hutchison Whampoa. Vodafone India's MD and CEO Martin Pieters and non- executive chairman Analjit Singh held discussions with Revenue Secretary Sumit Bose and other officials, sources said. Vodafone is facing a tax liability in connection with the acquisition of Indian business of Hong Kong-based Hutchison Whampoa for USD 11.2 billion through a deal which was executed in Cayman Islands in 2007. The meeting follows a reminder notice by the Revenue Department to Vodafone earlier this month. The British telecom firm had replied to the notice saying it believed that no tax was liable for the 2007 deal. To this, the Revenue department suggested that both sides should negotiate and find solution to the matter. Earlier in the day, Telecom Minister Kapil Sibal assured Vodafone that the government was ready to "collaborate" and look at its concerns. "...We are always ready to collaborate with Vodafone and to look at some of their concerns," Sibal said while releasing Vodafone's sustainability report 2012. "I can assure Martin Pieters (Vodafone India MD and CEO) and other telecom operators that the government is very, very, very serious about the concerns they have expressed and I can give an assurance today that 2013 will be a different year for the telecom sector," Sibal said. Responding to the assurance given by the Telecom Minister, Pieters said, "I am glad that he gave us some hope. Now that hope needs to translate into action." Although the Vodafone had won the tax case in the Supreme Court, the then Finance Minister Pranab Mukherjee amended the tax laws with retrospective effect to bring such deals in the tax net. Concerned over the global outcry over retrospective amendment, the government had asked tax expert Parthasarthi Shome to look into the concerns and suggest corrective measures. The Shome Committee in its draft report had suggested that the government should refrain from changing tax laws with retrospective effect. If it was not possible to do so, it said, the government might recover tax dues from Vodafone but waive interest and penalty. The government is likely to announce some steps to deal with the issue in the Budget for 2013-14 which will be unveiled in the Lok Sabha on February 28. |
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