India on Thursday challenged the international arbitration court’s ruling in favour of Vodafone Plc in the retrospective tax case.
About Tax dispute
British telecom giant Vodafone Group plc in September this year had won an arbitration against the Indian government over a demand for Rs 20,000 crore in taxes using retrospective legislation.
Than the Indian tax department had made a claim of Rs 20,000 crore against the telco based on retrospective amendments.
The Centre had then said that it will study the arbitration award and decide on its future course of action.
Where it start from?
In May 2012, Parliament passed the Finance Act 2012 that amended various provisions of the Income Tax Act 1961 with retrospective effect to tax any gain on transfer of shares in a non-Indian company which derives substantial value from underlying Indian assets.
The company was in January 2013 served a tax notice of Rs 14,200 crore after including interest on the principal amount.
A year later, Vodafone challenged the tax demand under the Dutch BIT.
The company in April 2014 served the notice of arbitration after out-of-court dispute resolution talks failed.
The tax department in February 2016 served a demand notice of Rs 20,000 crore, including interest accruing since the date of the original demand.
And now, In September, Vodafone won the arbitration against the demand of Rs 20,000 crore in taxes.
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