Vodafone on Wednesday countered the Government’s assertion of a breakdown in talks over its tax dispute and said capital gains from the Hutchison transaction and a separate transfer pricing notice relate to the same deal and should be considered together for conciliation.
“The Vodafone India Services (VISPl) transfer pricing dispute on the alleged options transfer is entirely included within the dispute about tax on the Hutchison Essar sale,” Vodafone said in a statement.
The UK telecom company also said it responded in time to all government communication on the conciliation process initiated to resolve the Rs 20,000 crore capital gains tax case arising from its purchase of a stake in Hutchison Essar.
The statement came a day after Finance Minister P Chidambaram told PTI in an interview that Vodafone has not been able to make up its mind on whether to go forward with conciliation and it is up to the revenue department to enforce the tax notice on it.
Vodafone said in seeking to tax the full value of the Hutchison Essar sale and then to claim tax on an alleged transfer of options in the Hutchison Essar sale, “the government is seeking to tax one event twice.”
Conciliation talks had broken down after Vodafone International Holdings BV issued a supplementary notice to the government, invoking the Bilateral Investment Promotion and Protection Agreement, and demanded that the transfer-pricing case be clubbed with the capital gains tax matter.