New Delhi: UK telco Vodafone Group Plc won international arbitration against India over a tax lawsuit on Friday ₹20,000 crore. The Permanent Court of Arbitration in The Hague ruled that the conduct of the Income Tax Department violates “fair and equitable” treatment.
Vodafone was represented in The Hague by DMD Advocates.
The court ruled that the Indian government’s imposition of a tax liability on Vodafone violates the investment treaty agreement between India and the Netherlands, Reuters reported, citing a source.
Spurred by the news, on Friday the Vodafone Idea program on BSE closed 12% higher in ₹10.20.
In 2007, the IT department of India sent a lawsuit notice requesting capital gains taxes.
A fiscal claim of ₹The then government raised 11 billion rupees in connection with the acquisition of Vodafone for $ 11 billion from Hutchison Telecom’s stake in 2009.
The government had said at the time, that the Hutchison-Vodafone deal was subject to deduction of tax at source (TDS) under the Income Tax (IT) Act, and since Vodafone had not deducted tax at source, the government raised demand, which has expanded to ₹Rs 20 billion, including interest and penalties.
Although the Supreme Court subsequently annulled the lawsuit on January 20, 2012, the government retroactively amended its law, returning responsibility to the Vodafone Group.
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