The government has appointed former Supreme Court chief justice R.C. Lahoti as the arbitrator in the Rs 270 billion tax dispute involving Vodafone Group Plc. Meanwhile, the government has also emphasised that it is committed to resolving all the issues pertaining to retrospective taxation as it wants to promote a stable fiscal regime.
The tax dispute between the Indian government and Vodafone Group arose over the capital-gains tax related to the telecom company?s 2007 acquisition of Hutchison Whampoa Limited?s Indian telecom assets. Vodafone acquired Hutchison Telecommunications International Limited through the sale of a Cayman Islands-based firm called CGP Investments Limited, which was a unit of Hutchison. The second case relates to the transfer-pricing case involving Vodafone India Services.
Vodafone International Holdings BV filed for arbitration on April 17, 2014 under the bilateral investment protection agreement between India and the Netherlands, questioning the government?s enactment of the retrospective tax laws in 2012 that made the telecom company liable to pay tax even after a favourable apex court judgement.
