Vodafone wins $2 billion tax dispute case against the Indian government
VodafoneGroup Plc has won the $2 billion tax dispute case against the Indian government.
- The international tribunal has ruled that the Indian government’s decision to impose tax retrospectively is in breach of the investment treaty between India and the Netherlands.
- The Indian government had retrospectively imposed capital gains tax on Vodafone’s acquisition of Hutchison Whampoa in 2007.
AdvertisementVodafone Group Plc has won the $2 billion tax dispute case against the Indian government. The case was filed by Vodafone in an international tribunal headed by Sir Franklin Berman, a leading UK barrister.
According to a Reuters report quoting unnamed sources, the arbitration has ruled that the Indian government’s decision to impose tax retrospectively on Vodafone is in breach of the investment treaty between India and the Netherlands.
A 14-year long dispute comes to an end
Vodafone had knocked on the doors of the international arbitration tribunal in 2018, questioning the Indian government’s decision to retrospectively impose capital gains tax on its acquisition of Hutchison Whampoa in 2007.
In 2007, Indian tax authorities served a notice to Vodafone International Holdings BV for failing to deduct withholding tax from Hutchison Whampoa on its acquisition. Vodafone challenged this in the Supreme Court, which ruled in its favour in 2012.
However, the Indian government then went back and passed legislation, giving it powers to charge tax retrospectively. It then raised a demand of capital gains tax of ₹7,970 crore on Vodafone, which ballooned to ₹22,100 crore after interest and penalties.
In 2018, Vodafone challenged this decision under the Netherlands-India Bilateral Investment Treaty.
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