The government had lost an international arbitration case against Vodafone in September.
India has challenged in Singapore an international arbitration tribunal’s verdict against it in a $ 2 billion tax lawsuit involving Vodafone Group Plc, according to sources. This development comes after the government lost an international arbitration case against Vodafone in September over a retrospective $ 2 billion tax dispute.
The international arbitration tribunal in The Hague ruled that the Indian government’s imposition of a tax liability on Vodafone violated the investment treaty agreement between India and the Netherlands.
The court, in its ruling, had said that the government should stop requesting fees from Vodafone and pay more than Rs 40 million to the company as partial compensation for its legal costs.
The tax dispute, involving interest of Rs 12,000 crore and Rs 7,900 crore in penalties, stems from Vodafone’s acquisition of Hutchison Whampoa’s Indian mobile assets in 2007. The government said Vodafone was required to pay taxes on the acquisition, which the company contested.
In 2012, India’s high court ruled in favor of the telecom provider, but the government changed the rules later that year to allow it to tax deals that had already been concluded.
Vodafone started arbitration proceedings against India in April 2014.
India is involved in more than a dozen international arbitration cases against companies, including Cairn Energy, for retrospective tax claims and cancellation of contracts.
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