Vodafone retro tax case: All you need to know

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Synopsis

ET Bureau
TRANSACTION

TAX TROUBLE

  • OCT 30, 2009: Income tax dept served notice to Vodafone International Holdings
  • Notice under Sections 201 and 201 (1A) of the Income Tax Act for non-deduction of tax at source on the $11.2 bn transaction
  • OCT 30, 2010: IT Dept ordered Vodafone to furnish Rs 11,218 cr under Sections 201 and 201(1A).
  • APR 29, 2011: Rs 7,900 cr penalty was imposed

LITIGATION

  • SEPT 8, 2010: The Bombay High Court upheld the tax authorities decision. Dept raised tax demand in the subsequent month
  • JAN 20, 2012: SC set aside Bombay High Court decision; quashed tax & interest demand
  • It said transaction was between two overseas entities & Indian tax authorities had no territorial tax jurisdiction
  • FEB 17, 2012: Govt filed review petition
  • MAR 20, 2012: SC dismissed the review petition

THE RETRO AMENDMENT

  • 2012 Indian govt amended the Income Tax Act retrospectively
  • Section 119 of the Finance Act validated the tax levied on Vodafone
  • Government said the amendment was only a clarification to remove ambiguity and provide certainty

TAX DEMAND BACK ON TABLE

  • JAN 3, 2013: IT dept raised a fresh demand was issued for Rs 11,218 cr
  • Vodafone subsequently sought to settle the case
  • A committee set up to resolve the issue failed to make any headway


ARBITRATION

  • APR 2014: Vodafone served arbitration notices under the India-Netherlands treaty
  • New government did not roll back demand but said no fresh action under retrospective tax
  • A fresh demand was issued on February 12, 2016, for Rs 22,100 cr tax
  • SEPT 25, 2020: The Hague-based arbitration court ruled in favour of Vodafone
  • DEC 21, 2020: India challenges arbitration award at Singapore

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