Jaitley Defends Appeal in Vodafone Tax Case

Why should the government not file an appeal when it thinks that it is an appealable order, Jaitley asked.

Published: 20th April 2016 09:12 PM  |   Last Updated: 20th April 2016 09:12 PM   |  A+A-

vodafone-reuters

Show-cause notices to five private operators, including Bharti Airtel, Vodafone, Idea Cellular, Reliance Communications and Tata Teleservices, involving about Rs 1,637 crore were issued for under-reporting revenues a few years ago. | (File/Reuters)

By PTI

NEW YORK: Defending move to appeal against the Bombay High Court verdict in the Rs 8,500-crore Vodafone transfer pricing case, India's Finance Minister Arun Jaitley on Wednesday said the case had nothing to do with retrospective tax issue and no company is immune from paying taxes.

"Why should the government not file an appeal when it thinks that it is an appealable order," he told ET Now. "There is no company in the world that is immune from paying taxes."

Jaitley was responding to a question on the tax department deciding to challenge an October 8, 2015 decision of the Bombay High Court in the Supreme Court through a Special Leave Petition (SLP).

"There are important questions of law which go to the Supreme Court. This case has nothing to do with the retrospective tax issue," said Jaitley, who is here on a seven-day official tour.

Vodafone had got favourable verdicts from the Bombay High Court in two tax cases last year.

The first one pertained to the High Court rejecting tax authorities claim that Vodafone priced the shares of its stakes in its Indian companies sold to other arms of Vodafone in a way to avoid taxes. The Income Tax Department had sought Rs 3,000 crore in taxes.

In the second case, the High Court had on October 8 ruled that the Department did not have the jurisdiction on the sale of Vodafone's call centre business to Hutchison Whampoa Properties and assignment of call options to Vodafone International Holdings BV in 2007-08.

The Income Tax Department has decided to appeal against the second verdict. It has, however, decided not to appeal against the first case alongside a similar transfer-pricing case won by Royal Dutch Shell.

Besides the two cases, Vodafone is fighting a separate larger case relating to imposition of taxes using retrospective legislation over its 2007 acquisition of an Indian telecom group. The case is awaiting international arbitration.

"There can't be a principle that a company had once an issue of retrospective taxation, this company is immune from other forms of taxation. So If there are legitimate issues with regard to other areas, it is between the company and department to sort them out," Jaitley said on Vodafone case.

He said retrospective tax is an issue of the past.

"It is an issue which the previous government has created. It is an issue which we have resolved. For one or two cases which are pending, we have given several options of resolving these issues," he said.

The Minister was referring to his Budget proposal to waive interest and penalty if the companies involved in retrospective tax cases like Vodafone and Cairn Energy plc of UK paid the principal tax amount.

"We want a predictable tax regime. Therefore, the predictability of tax regime is ensured by not having retrospective taxation and that is the clear policy of the government," he said.

Investors, he said, are very clever people who understand the sea change that has taken place in India. "I don't have to smoothen any nerves, investors are very enthusiastic and bullish about India."

Stay up to date on all the latest Nation 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.)

Comments

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 newindianexpress.com 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 newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com 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. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp