INDIA has time till the last week of December to appeal against an international arbitration case which scrapped a $2 billion tax dispute against Vodafone Group in September.
India’s finance secretary Ajay Bhushan Pandey said that the government is examining all aspects to arrive at a decision on whether to appeal against the verdict.
“We are still examining various aspects and a decision would be taken in due course. All arbitration orders if at all have to be appealed, have a time limit of 90 days. So, we have time to decide, so will decide,” he told PTI.
An international arbitration tribunal in The Hague ruled that India‚Äôs imposition of a tax liability on Vodafone, as well as interest and penalties, were in a breach of an investment treaty agreement between India and the Netherlands.
It also directed India to pay $5.47 million to the company as compensation for its legal costs.
India had claimed a total of $3.79bn including about $2bn in tax, as well as interest and penalties.
Vodafone had challenged before the arbitration tribunal India’s usage of a 2012 legislation that gave the government powers to retrospectively tax deals like Vodafone’s $11bn acquisition of 67 per cent stake in the mobile phone business owned by Hutchison Whampoa in 2007.
The arbitration tribunal had said India’s “conduct in respect of the imposition” of tax demand on Vodafone “notwithstanding the Supreme Court judgement is in breach of the guarantee of fair and equitable treatment” in the bilateral investment protection treaty.
In 2012, India‚Äôs top court ruled in favour of the telecom provider but the government changed the rules to enable it to tax deals that had already been concluded.
In 2014, Vodafone initiated arbitration proceedings against India.