The high-profile meeting between the top executives of British telecom major Vodafone and senior finance ministry officials on Tuesday on taxing its 2007 acquisition of Hutchison’s stake in Hutch-Essar ended with little headway with both sides sticking to their positions.
Sources said while Vodafone executives presented the option of the government reducing the principal tax amount to Rs 2,500 crore from Rs 7,990 crore and waiving the interest and penalty components, the tax department did not agree.
The ministry said it could consider waiving the penalty component but the company needs to pay up the tax and interest components.
Sources said the maximum leniency the ministry could be inclined to show was to let go of both penalty and the interest components.
In the absence of consensus, more meetings may take place but no new dates have been fixed so far.
Tuesday’s meeting was attended by Vodafone India chairman Analjit Singh, group external affairs director Matthew Kirk and global CFO Andy Halford. Representing the government were revenue secretary Sumit Bose and Central Board of Direct Taxes chairperson Poonam Kishore Saxena.
After the two-and-a-half hour meeting, company executives left the North Block, which houses the finance ministry without taking any questions from waiting mediapersons.
The revenue department had recently sent a tax reminder to the company regarding the capital gains tax arising out of the ‘indirect’ transfer of underlying Indian assets of Hong Kong-based Hutchison Whampoa to Vodafone through a Cayman Island-incorporated entity. FE
‘Govt to look at Vodafone concerns’
Telecom Minister Kapil Sibal on Tuesday assured British telecom major Vodafone, which is facing a tax liability of Rs 11,200 crore, that the government was ready to collaborate and look at its concerns.
“We are always ready to look at some of Vodafone’s concerns,” Sibal said at an event to release Vodafone’s sustainability report.
He added: “I can assure... that the government is very, very, very serious about the concerns they have expressed and I can give an assurance today that 2013 will be a different year for the telecom sector.” ENS