Vodafone Retrospective Tax Case: Vodafone Wins

Vodafone Retrospective Tax Case: Vodafone wins big in Arbitration Tribunal against the Government of India. Veteran telecom company Vodafone Group Plc has won a major victory in the international arbitration tribunal in a Rs 20,000 crore retrospective tax dispute against the Indian government.

Vodafone Group plc gave this information on Friday. The current case was one of the country’s most high-profile controversies related to tax. A source said that a tribunal based in The Hague has stated that the tax liability imposed by the Indian government on Vodafone is in violation of the investment agreement between India and the Netherlands.

Britain’s leading telecom company has won the case related to retrospective tax. A source said that the Indian government had claimed a total of 279 billion rupees. This included taxes and interest and penalties of nearly two billion dollars.

According to the source, the tribunal said in its decision that the Indian government should stop demanding arrears from Vodafone and pay the company £ 4.3 million for partial compensation of legal expenses.

The Finance Ministry has said that it will study the matter carefully with its lawyers. The Finance Ministry has issued a statement saying that after deliberations, the government will consider all options and take a decision on the future strategy.

The dispute has been going on since the acquisition of Hutchison Whampoa’s Indian mobile assets by Vodafone in 2007. The government says that there is a tax liability for the acquisition on Vodafone, which was challenged by the company.

In 2012, the Supreme Court of India ruled in favor of the telecom company, but the government changed the rules in the same year, giving the government the power to tax even the earlier completed deal. On Friday, shares of Vodafone’s Indian unit gained 13 percent.