Relief For Vodafone In Rs.32,000 Crore Tax Case

Published: 28th January 2015 07:25 PM  |   Last Updated: 28th January 2015 07:25 PM   |  A+A-


NEW DELHI: The government Wednesday decided not to appeal against a Bombay High Court ruling that telecom service provider Vodafone was not liable to pay tax demand of Rs.3,200 crore in a transfer pricing case, Communications and IT Minister Ravi Shankar Prasad said here.

"The cabinet has decided not to move Supreme Court in this regard. This is an important decision," he told reporters after a meeting here of the union cabinet presided over by Prime Minister Narendra Modi.

Prasad said: "Today, the Cabinet by taking a decision not to challenge in the Supreme Court (the Bombay High Court) order of holding Vodafone India's contention that the transaction, being international, is not amenable to tax... we have given a kind of signal...

"Mainly where Income Tax liability is clear, unambiguous it shall be charged, where it is over-stretched without any legal authority the government will be fair. That is the indication," the minister said.

Prasad said Finance Minister Arun Jaitley discussed the matter with the entire Central Board of Direct Taxes, Attorney General Mukul Rohatgi and Solicitor General Ranjit Kumar before arriving at this decision.

“After legal examination, it was deduced that the Bombay High Court decision was right and this fruitless litigation is avoidable. Therefore, a conscious decision has been taken not to file an appeal in the Supreme Court,” Prasad said.

The Bombay High Court, in an order Oct 10, 2014, had said the UK-based Vodafone is not liable to pay an income tax demand of Rs.3,200 crore in a case relating to transfer pricing.

The Income Tax department had asked the company to pay additional income tax alleging that it had undervalued its shares in its subsidiary Vodafone India Services while transferring them to the parent company.

Stay up to date on all the latest Business news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)


Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on are those of the comment writers alone. They do not represent the views or opinions of or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp