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India to Take its Time in Vodafone Tax Case
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India's finance minister P Chidambaram said the government will not take any "rash" action against Vodafone in its tax dispute with Indian authorities.
Vodafone won a lengthy battle over a US$2.2 billion tax demand from the Indian government, but the government then retrospectively change the law to make Vodafone liable. Vodafone is fighting the action, while the government has passed the matter to the Income-Tax department.
Referring to the Income Tax officers, he said "They and are not going to act rashly," said Chidambaram. "These are not small amounts on which you can take a rash decision."
The Finance Ministry will wait for the final report from the Parathasarathi Shome committee later this month before taking a decision, he added.
The Shome panel, which was set up in July to recommend a roadmap on tax avoidance rules, has proposed deferring the rule changes for three years. The goverment widened its remit over the weekend to look into the Vodafone case - which involved the sale of a foreign company which happened to own a stake in an Indian company, and thus was not liable for Indian taxes.
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