Vodafone Wins International Arbitration Against Indian Government in Rs 20,000 Crore Tax Demand Case

New Delhi: Vodafone has won the case against India over a retrospective tax demand of more than Rs 20,000 crore. Also Read – Free Zee5 Subscription Plans: Vodafone Idea (VI) Offers New Prepaid Plans With One Year Zee5 Subscription

The Permanent Court of Arbitration located at The Hague has ruled that the conduct of India’s tax department is in breach of “fair and equitable” treatment. Also Read – IPL 2020: BCCI Gets Government Approval to Stage IPL in UAE, Says League Chairman Brijesh Patel

Vodafone had moved the International Court of Justice (ICJ) in 2016 due to a lack of consensus between the parties’ arbitrators in finalising a judge for the tax dispute. Also Read – Is PUBG Set to Be Banned in India? Gamers Are Scared After 275 Chinese Apps Are on the Radar | See Memes

Following this, a tribunal was constituted in June 2016 after Vodafone challenged India’s use of a 2012 legislation that gave it powers to retrospectively tax deals like Vodafone’s $11 billion acquisition of a 67 per cent stake in Hutchison Whampoa in 2007. The retrospective tax law had been enacted after the Supreme Court judgement went in Vodafone’s favour.

Vodafone had challenged the tax department’s demand of Rs 7,990 crore as capital gains taxes (Rs 22,100 crore after including interest and penalty) under the Netherlands-India Bilateral Investment Treaty (BIT).

Buoyed by the arbitration award, Vodafone Idea stock closed 12 per cent higher at Rs 10.20.

In 2007, the Indian Income Tax department had slapped a demand notice on Vodafone seeking capital gains tax.