Vodafone Still Seeking Conciliation Over Indian Tax Dispute
Published on: 2nd Jun 2014
Vodafone India executives held meetings with government officials last Friday in an effort to settle the long running tax dispute between the two sides before it is handed to international arbitration.
The two sides had been seeking a compromise, but last month Vodafone finally decided to trigger its option for arbitration, which could see the dispute drag on for several more years.
An arbitrator has to be appointed by June 15th.
A finance ministry official told the Economic Times that Vodafone is keen on conciliation and settling the tax dispute outside the judicial process.
The meetings come as the new government settles in and appoints its officials. They are keen to secure some quick wins to show effectiveness and that may have prompted the fresh negotiations.
The new law minister Ravi Shankar Prasad has already indicated that the previous government's decision to retrospectively change the law was a flawed decision as it scared off foreign investors.
At stake is a USD2.5 billion tax demand, with potential for penalties and interest that stems from Vodafone's USD11 billion purchase of Hutchison Essar.
Although Vodafone won the court case against the tax demands, the government then changed the law to over turn the court decision, and the two sides have been locked in negotiations ever since.
On the web: Economic Times