The Telegraph
Wednesday , June 18 , 2014
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Arbitrator for Voda tax case

New Delhi, June 17: The government today appointed former Chief Justice of India R.C Lahoti as its arbitrator in the Rs 20,000-crore Vodafone tax case.

Vodafone had served an arbitration notice on the government over a tax demand that had been served on it after the government had decided to defend its demand for tax deducted at source out of monies paid by the British telecom giant for buying out Hutchison’s Indian arm in 2007.

While the basic demand is of Rs 7,990 crore, the total outstanding is Rs 20,000 crore after including penalty.

Officials said the new government had decided to go ahead with the decision to seek arbitration proceedings and appointed Lahoti from its side. In its notice dated April 17, Vodafone had said it would go ahead with the international arbitration, preferably in London, to resolve the long-pending tax dispute concerning its 2007 acquisition of Hutchison Whampoa’s stake in Hutchison Essar.

Several ministers of the current government have spoken against retrospective taxation in the past and urged the government to come up with a stable tax regime.

Meanwhile, telecom minister Ravi Shankar Prasad today said the finance ministry had prioritised the resolution of tax disputes involving telecom companies.

In February, the cabinet had put on hold the proposal to withdraw the conciliation offer, pending settlement of Vodafone’s transfer-pricing case at the Income Tax Appellate Tribunal.