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Business Line/ - Markets, Sáb, 31 de Março de 2012
CLIPPING INTERNACIONAL (Supreme Court)
Retrospective change in tax laws grossly
unfair: Vodafone
New Delhi, March 30:
Vodafone on Friday said that any move by the
Government to retrospectively change the tax regime
was grossly unjust. The telecom major said the
proposed changes in the Finance Bill contradicts the
conclusions of the Supreme Court and hence raises
constitutional questions for India.
“The proposed changes seek to apply, on a
retrospective basis, tax liabilities which explicitly were
not in force at the time of the transaction between
Vodafone and Hutchison,” the British telecom major
said in a statement.
This is the first reaction from Vodafone after the
Finance Minister, Mr Pranab Mukherjee, moved
numerous amendments to the income-tax law to
reverse the Supreme Court ruling on the matter. If the
amendments were to be enacted into law, Vodafone
could face a tax bill of at least $2 billion for the near
$11.2-billion deal with Hutchison in 2007.
The Supreme Court had, in the Vodafone case, ruled
that gains derived from transfer of shares of a foreign
company cannot be taxed in India, even if the value of
shares is substantially derived from assets located in
India.
Now, the Government has come up with a spate of
amendments that too on a retrospective basis from
April 1962, to bring Vodafone-Hutchison type
transactions into the tax net. The amendments are
being proposed as part of the Finance Bill 2012.
“These facts have been examined in detail by the
highest court in the land, which delivered an
unambiguous judgment affirming that there is indeed
no tax due on the transaction,” Vodafone said adding
that since it was the acquirer in this transaction, the
company made no capital gain whatsoever.
“The proposed changes in the Finance Bill
fundamentally contradict the firm conclusions of the
apex court and as such raise important constitutional
questions for India as well as widespread and
profound concerns in the minds of international
investors,” Vodafone said. The telecom company said
that it was considering a number of courses of action,
both in India and internationally.
tkt@thehindu.co.in
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