Sunday 22 June 2014

Vodafone tax dispute: Former Chief Justice of India RC Lahoti named arbitrator- WHAT IS VODAFONE TAX DISPUTE?

Former Chief Justice of India RC Lahoti has been appointed as arbitrator in the high-profile tax dispute with the British telecom operator Vodafone amid increasing expectation that the new Narendra Modi-led government may scrap the controversial retrospective amendment that led to the tussle.


  • British Telecom major Vodafone was slapped with an income tax demand notice of Rs.11,200 crore on its 2007 acquisition of Hong Kong based Hutchinson Whampoa's stake in its Indian telecom business.
  • Later the Supreme Court judgement ruled in favor of the company.
  • Later the then Finance Minister Pranab Mukherjee amending the Income Tax act, 1961, with retrospective effect to undo the Supreme Court judgement that had ruled in favor of the company.
The Indian Government is working towards a solution based on the recommendations of the Shome Panel, which suggested that,
either the government should withdraw the retrospective tax amendment or waive the penalty in case it had to recover the taxes.


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