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Vodafone issues notice to India over tax proposal | Telecom group Vodafone has issued notice to the Indian Government under Bilateral Investment Protection Treaty over retrospective tax proposal announced by Finance Minister Pranab Mukherjee in the Union Budget 2012-13. The company says the proposal in the budget to tax transactions with retrospective effect amounts to denial of justice. Calling the proposal a breach of obligation under
the bilateral investment treaty, Vodafone asked the Indian Government to abandon
or amend the retrospective proposal in the Finance Bill. Earlier, India said that
the move to amend the Income Tax act retrospectively is not Vodafone-specific.
"The clarificatory amendment is retrospective in character and it was not Vodofone-specific.
I don't see, in any manner, the investment climate will be hurt," Commerce and
Industry Minister Anand Sharma said. " India remains one of the best investment
destinations. Returns on investment in India is the highest in the world," he
added. UK-based mobile operator Vodafone purchased Hong Kong-based Hutchison's
telecom business, which included operations in India , in 2007 for about 11.2
billion dollars. Indian income tax authorities said the deal will attract tax
on it and sought Rs.11, 000 crore from Vodafone, which challenged the move. The
Supreme Court ruling held that Vodafone wasn't liable to pay tax on the deal,
following which the government has proposed to amend the tax laws retrospectively
to bring such deals into the net.
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