Arbitrators in tax dispute cases appointed: Sinha

The government on Friday said it had appointed arbitrators in the tax dispute cases with multi-national companies (MNCs), including Vodafone.

Minister of State for Finance Jayant Sinha said this in a written reply to a question in the Lok Sabha regarding top MNCs approaching the income tax department for resolution of disputes.

The government has received notices under Bilateral Investment Promotion and Protection Agreements (BIPAs) from Vodafone International Holdings BV, Vodafone Plc, Nokia Oyj, Cairn Energy Plc and Vedanta Resources Plc for resolution of disputes.

Sinha said: “It has been conveyed to these companies that the government of India neither finds their allegations acceptable, nor agrees with their contention that tax disputes can be resolved under the said agreements.

"However, in order to ensure that the interests of India in such Arbitration proceedings are protected, Arbitrators have been appointed by the government in accordance with the BIPAs."

He said the Income Tax Act 1961 provides legal remedies that can be resorted to by taxpayers in case they wish to dispute any tax demand raised in proceedings carried out by Income-tax Authorities in accordance with the provisions of the Act. "These remedies are regularly availed by the taxpayers for resolving tax disputes," he said, adding that the Act also provides the option of settlement of tax disputes by the Settlement Commission.