Govt to assess implications of SC ruling in Vodafone case

Hours after the Supreme Court gave its ruling in the Vodafone case asking the tax authorities to return over Rs 11,000 crore to the British Telecom major, the government on Friday said it will examine the issue as it has far-reaching revenue implications.

“It is a judgment of the Supreme Court. Naturally, we will have to study the judgment,” Finance Minister Pranab Mukherjee said after he and Law Minister Salman Khurshid held discussions on the apex court’s decision, which has gone against revenue authorities.

“We obviously need revenue for government’s important programmes and the other thing is the certainty in law – we have to examine both areas,” Khurshid said.

In a landmark judgment, seen as boosting investor sentiment at a time when the economy needs foreign investment to spur growth, the Supreme Court asked the Income Tax Department to return Rs 2,500 crore deposited by Vodafone International Holdings within two months along with four per cent interest.

The court also asked its registry to return within four weeks, the bank guarantee of Rs 8,500 crore given by the telecom major and held that the I-T department has no jurisdiction to levy tax on overseas transactions between two foreign entities.

Experts are of the view that the authorities may file a review petition in the case as it has far-reaching legal implications for other companies too.

However, CBDT Chairman M C Joshi said that a decision on the review petition will be taken only after going through the judgment in detail.