Vodafone India Chairman Analjit Singh on Tuesday met Finance Minister P Chidambaram with a fresh proposal for early resolution to the tax dispute over which government has offered conciliation.
New Delhi: Vodafone India Chairman Analjit Singh on Tuesday met Finance Minister P Chidambaram with a fresh proposal for early resolution to the tax dispute over which government has offered conciliation.
Vodafone is believed to offered to pay USD 650 million (Rs 3,900 crore) towards tax dues, as against the government's demand of USD 1.4 billion (Rs 8,400 crore), sources said.
Singh's meeting follows the British telecom firm seeking time to reply to Revenue Department's offer for a non-binding conciliation under the Indian laws.
While Vodafone had shown keenness to go in for arbitration under the United Nations Commission on International Trade Law (UNCITRAL) law, India has proposed conciliation under the Indian Arbitration and Conciliation Act.
Finance Secretary R S Gujral too is believed to have met top Vodafone officials in Mumbai last month.
However, a top government functionary said it was in the interest of Vodafone to resolve the issue as the firm is saddled with the tax liability.
Vodafone's reply to the government on the issue was not satisfactory as they nitpicking on things like venue and rules for conciliation.
The functionary said it was for Vodafone to show greater alacrity and enthusiasm to resolve the tax dispute.
Vodafone is facing tax liability of over Rs 11,200 crore, along with interest, on its 2007 acquisition of Hutchison Whampoa's stake in Hutchison Essar.
The Supreme Court last year had ruled in Vodafone's favour, saying the British company was not liable to pay any tax over its 2007 acquisition of mobile phone assets in India.
But the government later in the year changed the rules to enable it to make retroactive tax claims on already-concluded deals, drawing criticism from global business groups.
Following that, the Income Tax Department had issued a letter in January to Vodafone International Holdings BV stating that the company is required to pay tax demand of about Rs 11,217 crore along with interest.
However, Vodafone replied saying that they do not owe anything to the Indian Government. Vodafone earlier wanted to take India to international arbitration but later offered conciliation on the issue.