British telecom major Vodafone, which has submitted its response to an offer of non-binding conciliation to resolve a tax dispute, has suggested that all tax claims against the company be clubbed together for settlement.
Vodafone, according to sources, in its response to the Finance Ministry’s offer for conciliation, had expressed keenness to settle the long-pending capital gains tax dispute. The company suggested that a transfer pricing case before the Income Tax Appellate Tribunal (ITAT) should be clubbed with the Rs 11,200 crore capital gains tax dispute, the sources said.
“Vodafone is likely to meet Finance Ministry officials this month. They have said they are keen on further conciliation talks,” according to sources.
The ITAT last week stayed a Rs 3,700-crore tax claim by the Income Tax Department on Vodafone India in a transfer-pricing dispute and asked the company to deposit Rs 200 crore as initial payment and submit bank guarantees for the remaining sum.
“Vodafone is pushing for early resolution of the transfer-pricing case. It also wants bundling of all tax cases against it for settlement,” sources said.
The Rs 11,200 crore tax dispute relates to Vodafone’s 2007 acquisition of Hutchison Whampoa’s stake in Hutchison Essar.
The transfer-pricing case concerns Vodafone’s issue of shares in its Pune-based BPO arm Vodafone India Services to Vodafone Teleservices Mauritius for Rs 246.38 crore in FY08, which, according to the I-T department, was undervalued.
The Cabinet had approved non-binding conciliation with the British telecom major in June last year. The outcome of the conciliation, however, will need to be ultimately vetted by Parliament as it would require an amendment to the I-T Act.