Tax controversy: CEO Vittorio Colao meets FM Pranab Mukherjee
May, 02nd 2012
Vodafone group chief executive officer Vittorio Colao on Tuesday met finance minister Pranab Mukherjee and is learnt to have sought a tax exemption related to the company's 2007-deal where it acquired the Indian assets of Hong Kong based Hutchison.
""We just presented our case to the Finance Minister,"" Colao told reporters after the meeting.
The meeting was also attended by Revenue Secretary R S Gujral, Chairman of Central Board of Direct Taxes (CBDT) Laxman Das, Joint Sectrary (International Taxation) S K Mishra and Vodafone India Non-Executive Chairman Analjit Singh.
Colao is also learnt to have told the finance ministry officials that the company was not looking at evading taxes, but was only acting on the legal advice it had received in this case.
ET had reported on Tuesday that Vodafone Plc, embroiled in a multi-billion dollar tax case with the Indian government, had approached the finance ministry to waive the penalty incidence and interest amount of about Rs 8000 crore , reducing its tax liability substantially to Rs 12,000 crore.
Vodafone's tax controversy relates to Pranab Mukherjee's budget proposal to retrospectively tax overseas transactions involving local assets which is widely seen as targeting UK-headquartered telco's $11 billion purchase of Hutchison Essar.
The proposal has sparked off an international uproar with the UK's Chancellor of Exchequer George Osborne raising the issue with Pranab Mukherjee, and global trade bodies representing more than 250,000 companies across the US, Europe and Asia warning that foreign investment flows into India could be impacted.
In January this year, Vodafone won a four-year long legal battle against the government when the Supreme Court ruled that it did not need to pay Rs 11,000 crore in taxes because the transaction took place between two overseas firms and there was no provision in Indian law to tax such deals. The finance bill 2012, once approved by Parliament, overturns the Supreme Court ruling.
There has been speculation about Vodafone urging Hutch to pay capital gains tax on the sale of its Indian unit though has been no official confirmation of this.