Vodafone, on Wednesday, said it was ‘disappointed' with the Centre's decision to go ahead with its retrospective tax law amendment and reiterated to take ‘all possible steps' to safeguard its shareholders' interests.
The British telecom giant is facing an imminent tax demand for buying Hutchinson's stake in erstwhile Hutchinson Essar in 2007 for $10.70 billion.
The Lok Sabha has already approved the Finance Bill that amends law to retrospectively tax cross-border transactions dating back to April 1, 1962.
While Vodafone has won the tax case in the Supreme Court against the government's demand of over Rs.11,000 crore as tax on the deal, the government has moved to amend the law apparently to tax the Vodafone deal. “We are naturally disappointed that, despite very widespread concern in India and internationally, the government has not seen fit to propose amendments to address the uncertainty caused by retrospective tax legislation,” Vodafone said in a statement.
“It would be grossly unjust if, on the basis of legislation passed five years after the event, Vodafone were to be charged tax on a gain made by someone else, especially where the Indian Supreme Court unambiguously ruled that no tax was payable in India according to the laws of India in force in 2007. Given this clarity, there was no legal basis for Vodafone to withhold tax,” it added.
The British firm also pointed out that since its entry into the Indian market in 2007, it had invested over Rs.50,000 crore in its operations and had connected six-crore rural Indian customers.
“During the last four years, Vodafone also has been one of the larger taxpayers in India — with its Indian businesses paying over Rs.29,000 crore into the Indian Exchequer. To underline our commitment for the long term, despite making considerable investments over the past five years, Vodafone is yet to take a single rupee out of the country,” it added.
