Pranab, Vahanvati discuss Vodafone case

Finance Minister Pranab Mukherjee today held a meeting with Attorney General GE Vahanvati and is believed to have discussed whether the government should file a review petition in the Supreme Court verdict on the Vodafone tax dispute case.

Vahanvati, who met Mukherjee at the North Block in the evening, refused to speak to waiting reporters.

Sources said the Attorney General was called by the Finance Minister for his views on filing a review petition on the January 20 Supreme Court order on Vodafone case.

The I-T department had raised a demand of Rs 11,000 crore tax from Vodafone International Holdings following its acquisition of interests in Hutchinson-Essar Limited in 2007 overseas.

In its judgement that has wide tax implications, the apex court had set aside the Bombay High Court's decision that had favoured the Income-Tax Department.

In the ruling, the apex court had also asked the I-T Department to return Rs 2,500 crore deposited by Vodafone International Holdings within two months along with 4 per cent interest.

The Supreme Court decision will have implications on similar cross-border deals where the companies have not paid capital tax gains.

The Finance Ministry had earlier constituted a 10-member 'core committee' comprising senior officials of the tax department to study the judgement.

The committee, headed by Director General International Taxation (DGIT) R N Dash, had deliberated on the issue and submitted a preliminary report to the Central Board of Direct Taxes.