NEW DELHI: India on Thursday challenged the international arbitration tribunal’s ruling in favor of Vodafone Plc in the retrospective tax case, according to press reports. The appeal was filed on December 21 in a Singapore court.
In September, Vodafone had won the long-pending arbitration case against India’s Income Tax (TI) department which required ₹22,000 crore on a retrospective basis.
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In November, additional attorney general Chetan Sharma, representing the Center, had told the Delhi high court that the cabinet’s empowered committee had not yet met to make a decision on whether to challenge the award and requested a two-week deadline.
Lead counsel Harish Salve, appearing on Vodafone, said the telecom company will not seek a second arbitration under the Bilateral Investment Promotion and Protection Agreement (Bipa) between India and the UK until the award published under it is annulled. of the Bipa India-Netherlands.
The higher court had heard a case related to the validity of the second arbitration initiated by Vodafone under the India-UK Bipa for the same retrospective tax claim.
On September 25, the Permanent Court of Arbitration in The Hague, Netherlands, held that any attempt by India to enforce Vodafone’s tax claim would be in violation of the country’s international law obligations.
The international court ruled that Vodafone’s India IT department’s tax lawsuit is a violation of the India-Netherlands bilateral investment treaty (BIT).
The dispute arose when the Indian government amended the Finance Act in 2012, introducing the power to retroactively tax any gains on the transfer of shares. Following the amendment, Vodafone was asked to pay a total of ₹Rs 22.1 billion, in two tranches, in retrospective capital gains taxes, including interest and penalties.
The amendment also overturned a 2012 Supreme Court ruling that went in favor of Vodafone.
Vodafone then challenged India’s amendment to law, which allowed the country to retroactively tax deals such as the Vodafone Group’s $ 10.9 billion acquisition of a 67% stake in Hutchison Essar in 2007.
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