Assocham calls for resolution of Vodafone tax issue
New Delhi: Ahead of British Prime Minister David Cameron's visit to India, industry chamber Assocham has called for the resolution of the Vodafone tax issue.
"We must get, once and for all, the Vodafone tax issue behind us. It has dragged too long for our comfort and the comforts of the global investors.
"We need to settle it fast so that a strong message is sent to the investors that the commercial disputes can be settled in a transparent and timely manner," Assocham President Rajkumar Dhoot said in a statement.
David Cameron will begin a three-day official visit to India from tomorrow.
Vodafone has been slapped with an income tax demand notice of Rs 11,200 crore on its 2007 acquisition of Hong Kong-based Hutchison Whampoa's stake in its Indian telecom business.
The liability arose following 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 favour of the company.
"While the British Prime Minister is expected to touch upon the Vodafone issue with the Indian authorities, the Indian industry would be pleased to see the end of the vexed issue so that no more negative perception is carried abroad," Dhoot said.
Dhoot said with recession like situation in most parts of Europe, India offers excellent opportunity for investment particularly in the infrastructure sector for the British companies.
"Although UK has emerged as the third largest source of foreign direct investment (FDI) for India, bulk of the cumulative inflows of USD 17 billion from that country were seen in fiscal 2011-12 because of a couple of big deals," he said.
"We need to somehow sell the India story to the British investors, when Cameron arrives here and engages with the top Indian leadership and business leaders along with a high powered delegation," Dhoot added.
He said while Britain is home to some of the biggest financial companies in the world, it is in the area of infrastructure like power, roads, ports and airports that India should make concerted efforts to woo them.
"These infrastructure areas offer ready market for India where wide gaps exist. However, what we must assure the global investors is a conducive policy environment in terms of clear cut rules and guidelines, whether in the public-private partnership or in the standalone projects," he said.
In terms of trade, the bilateral trade is USD 15 billion. "We should jack up the trade target as well and fix an ambitious milestone of USD 50 billion for the next three to four years," Dhoot added.