<div>In a week when Prime Minister Narendra Modi is seeking to promote a tax-friendly environment for foreign investors, British telecom major Vodafone on Tuesday received a reminder from the income tax department to pay up Rs 14,200-crore tax demand. <br /><br />It also received a threat for seizure of its assets in case of non-payment of tax dues, the company said. The tax demand relates to Vodafone’s $11.1 billion acquisition of Hutchison Whampoa’s 67 per cent stake in 2007. <br /><br />“The Indian government stated in 2014 that existing tax disputes, including ours, would be resolved through the existing judicial process,” Vodafone said in a statement. <br /><br />The company also alleged that there is disconnect between what the prime minister promised and what tax department executed. <br /><br />“In a week when Prime Minister Narendra Modi is promoting a tax-friendly environment for investors — this seems a complete disconnect between the government and the tax department,” Vodafone said.<br /><br />Retrospective taxation <br />At the inaugural of the ‘Make in India’ week in Mumbai on Saturday, the prime minister had said, “We have said we will not resort to retrospective taxation. And I repeat this commitment once again. We are also swiftly working towards making our tax regime transparent, stable and predictable.” <br /><br />Tax authorities have argued that since the 2007 deal involved the sale of an Indian asset, capital gains tax is payable. Vodafone challenged the initial demand, losing the case in a lower court but winning in the Supreme Court. <br /><br />The government, however, amended the tax laws with retrospective effect, following the Supreme Court judgment and sought to claim taxes from the company. <br /><br />Vodafone subsequently dragged the government to international arbitration and invoked the Netherlands-India bilateral investment protection treaty on government steps to tax the company. The matter is currently before an arbitration panel.<br /><br /></div>
<div>In a week when Prime Minister Narendra Modi is seeking to promote a tax-friendly environment for foreign investors, British telecom major Vodafone on Tuesday received a reminder from the income tax department to pay up Rs 14,200-crore tax demand. <br /><br />It also received a threat for seizure of its assets in case of non-payment of tax dues, the company said. The tax demand relates to Vodafone’s $11.1 billion acquisition of Hutchison Whampoa’s 67 per cent stake in 2007. <br /><br />“The Indian government stated in 2014 that existing tax disputes, including ours, would be resolved through the existing judicial process,” Vodafone said in a statement. <br /><br />The company also alleged that there is disconnect between what the prime minister promised and what tax department executed. <br /><br />“In a week when Prime Minister Narendra Modi is promoting a tax-friendly environment for investors — this seems a complete disconnect between the government and the tax department,” Vodafone said.<br /><br />Retrospective taxation <br />At the inaugural of the ‘Make in India’ week in Mumbai on Saturday, the prime minister had said, “We have said we will not resort to retrospective taxation. And I repeat this commitment once again. We are also swiftly working towards making our tax regime transparent, stable and predictable.” <br /><br />Tax authorities have argued that since the 2007 deal involved the sale of an Indian asset, capital gains tax is payable. Vodafone challenged the initial demand, losing the case in a lower court but winning in the Supreme Court. <br /><br />The government, however, amended the tax laws with retrospective effect, following the Supreme Court judgment and sought to claim taxes from the company. <br /><br />Vodafone subsequently dragged the government to international arbitration and invoked the Netherlands-India bilateral investment protection treaty on government steps to tax the company. The matter is currently before an arbitration panel.<br /><br /></div>
