₹20,000 cr retro tax case: Vodafone wins arbitration against India

Vodafone won the arbitration against India the international tribunal in The Hague.

UK Telecom giant Vodafone on Friday won a significant ruling against the Indian Government in an international court over ₹20000 crore dues which it had described as unfair.

The Permanent Court of Arbitration in the Hague ruled that conduct of the Income Tax Department is in breach of fair and equitable treatment.

The tribunal ruled that the government must cease seeking dues from the Vodafone and should pay 4.3 million pounds to the company as partial compensation for its legal costs.

The tax dispute stems from Vodafone's acquisition of the Indian mobile assets from Hutchison Whampoa in 2007. The government said Vodafone was liable to pay taxes on the acquisition.

In 2012, the Indian top court ruled in favor of the telecom provider but the government later that year changed the rules to enable it to tax deals that had already been concluded.

In 2014, Vodafone initiated arbitration proceedings against India.

India is entangled in more than a dozen international arbitration cases against companies, including Cairn Energy, over retrospective tax claims, and cancellation of contracts. The exchequer could end up paying thousands of crores in damages if it loses.

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