Cabinet to take call on Vodafone tax dispute: Chidambaram

Finance Minister P Chidambaram today said the Union Cabinet will take a final call on settlement of the Rs 11,200-crore Vodafone tax case after seeking opinion of the Attorney General.

"As far as Vodafone is concerned, they had written to us proposing conciliation. We have written back saying that yes your request will be considered by the competent authority. So the matter will go to the Cabinet," Chidambaram said.

Vodafone, which is facing a tax liability of Rs 11,200 crore for purchase of Hutchison Whampoa's stake in its Indian telecom business in 2007, had written to the Finance Ministry seeking settlement of the tax issue.

This follows Finance Ministry's reminder notice to the UK-telcom giant Vodafone in January for payment of tax.

Replying to queries on tax notice to Shell in the transfer pricing case, Chidambaram said such cases involving transfer of domestic assets in overseas deals have been referred to Attorney General G E Vahanvati for his opinion.

"So far as Shell is concerned and number of cases similar to that, there are order that have been passed. There is order of the tribunal in one.

"So what is the scope and interpretation of Chapter 10 to a case of this nature where shares have been allotted by a subsidiary to the parent company?

That question has been referred to the Attorney General few days ago and we are awaiting the advise of the AG. We are approaching all these cases in a purely professional manner," Chidambaram said.

The income tax department has charged Shell India with under-pricing a share transfer within the group by Rs 15,220 crore, and consequently evading taxes.
The order relates to the issue of 8.7 crore shares by Shell India to an overseas company Shell Gas BV in March 2009.