Lahoti to be arbitrator in Vodafone tax case

The government has appointed former Chief Justice of India R. C. Lahoti as arbitrator in the Rs.20,000-crore tax dispute case with U.K. telecom major Vodafone.

“Yes, he (Mr. Lahoti) has been appointed for arbitration from our side,” a Finance Ministry official told PTI.

Notice

The government’s decision was in response to an arbitration notice served by Vodafone International Holdings B.V. in April under the Bilateral Investment Protection and Promotion Agreement between India and the Netherlands for resolving the dispute.

Following the international arbitration notice by Vodafone, the Cabinet of the previous United Progressive Alliance regime on May 15 approved the withdrawal of a conciliation offer.

The Cabinet had approved the conciliation with Vodafone in June last year in a bid to resolve the capital gains tax dispute related to its 2007 acquisition of Hutchison Whampoa’s stake in Hutchison Essar.

Tax demand

While the basic tax demand was Rs.7,990 crore, the total outstanding, including interest and penalty, is estimated to have risen to Rs.20,000 crore.