The Income Tax department issued a reminder notice to Vodafone over its Rs 14,200 crore tax dues, a move which the UK firm said shows disconnect with Prime Minister Narendra Modi’s promise of a tax-friendly environment, but the government defended it saying the step was a routine exercise.
“The notice in Vodafone case is a routine exercise of sending a collection notice to all those whose dues are not stayed by any Court,” Revenue Secretary Hasmukh Adhia tweeted late in the night.
1/3 The notice in Vodafone case is a routine exercise of sending collection notice to all those whose dues are not stayed by any court.
— Dr Hasmukh Adhia (@adhia03) February 16, 2016
2/3 The party can always approach assessing office with a request to stay the demand as per law.
— Dr Hasmukh Adhia (@adhia03) February 16, 2016
3/3 In case assessing officer does not agree, party can go to next higher authority and get a stay.
— Dr Hasmukh Adhia (@adhia03) February 16, 2016
Tax authorities have issued a reminder to Vodafone Group Plc asking the company to pay Rs. 14,200 crore of tax dues — that the U.K.-based firm has referred to international arbitration.
“We can confirm that we have received a tax reminder from the Tax Department that also references asset seizures in the event of non-payment. This dispute is currently the subject of international arbitration,” Vodafone said in a statement on Tuesday. “The government stated in 2014 that existing tax disputes, including ours, would be resolved through existing judicial process.”
The notice to Vodafone International Holdings BV pertains to its 2007 acquisition of Hutchison’s 67 per cent stake in a telecom venture in India for $11 billion. The deal was executed through companies that are not based in India. But the tax department’s contention is that capital gains were made on assets in India.
“The Indian government stated in 2014 that existing tax disputes, including ours, would be resolved through the existing judicial process,” Vodafone said in the statement. The company also made a reference to the promise made by Modi at Make in India event in Mumbai on Saturday.
“In a week when Prime Minister Modi is promoting a tax-friendly environment for foreign investors – this seems a complete disconnect between the government and the tax department,” Vodafone said.
#Infosys founder Narayan Murthy says No Ease Of Doing Business, situation hasn’t changed at all. And now #Vodafone case proves that.
— Girish Kuber (@girishkuber) February 17, 2016
Can’t have two faces? #Vodafone restrospective tax pic.twitter.com/ziSPgwBGk2
— Harsh Goenka (@hvgoenka) February 17, 2016
@VodafoneIN , This is how we get stunned, when we get a Rs 1000 #bill when only Rs 200 is expected. #vodafonetax #billiodollartax
— venkatesh Shankar (@venkatesh4077) February 16, 2016