Govt took decision in favour of Vodafone also: Prasad

Minister Ravi Shankar Prasad said the revenue departmentwould explain under what circumstances the notice was issued

Rejecting Vodafone’s criticism over the Rs 14,200-crore tax notice, Telecom Minister Ravi Shankar Prasad on Wednesday said in the past, the government had taken decision in “favour” of the UK-based telecom giant also.

“I can only inform you that in the past, many decisions have been taken by the government in the favour of the company also. Decision on the tax matter in Bombay High Court, the government did not choose to appeal against that,” Prasad told reporters when pointed out that the telecom major has taken a serious objection to the notice.

The income tax (I-T) department has issued Vodafone a reminder over its Rs 14,200-crore tax demand and threatened to seize assets in the case of non-payment, a move the UK firm said shows disconnect with Prime Minister Narendra Modi's promise of a tax-friendly environment.

The Minister said in what circumstances the notice was issued and what were the nuances, “I think revenue department will explain that”.

The notice was sent on February 4 to Vodafone International Holdings BV seeking Rs 14,200 crore in taxes, which it says are due from its $11 billion acquisition of Hutchison Whampoa’s India telecom business in 2007. The matter is under international arbitration. On Tuesday, Revenue Secretary Hasmukh Adhia had tweeted: “The notice in Vodafone case is a routine exercise of sending collection notice to all those whose dues are not stayed by any Court.”

“The party (Vodafone) can always approach assessing officer with a request to stay the demand as per law. In case assessing officer does not agree, party can go to next higher authority and get a stay,” he tweeted further.

In January last year, the government had decided against appealing the high court order that absolved Vodafone of Rs 3,200 crore tax demand in a transfer pricing case.