Vodafone has won an arbitration against India over the government’s retro tax demand of Rs 20,000 crore at the Permanent Court of Arbitration in Hague. The Hague Court in its ruling said that the conduct of the Indian tax department is in breach of “fair and equitable” treatment. It has incurred over ? 12,000 crore in interest and ? 7,900 crore in penalties.
Vodafone was represented at the Hague by DMD Advocates, seeking protection from the retro tax demand through arbitration under the India-Netherlands Bilateral Investment Protection Agreement.
The company had approached court in 2016 in the dispute that stems from a retroactive tax claim for using airwaves and in license fees. The company in 2017 said an international tribunal would begin trial on the telco’s challenge to India’s retrospective legislation to seek more than Rs 20,000 crore in taxes.
The tribunal ruled that the Indian government’s imposition of a tax liability on Vodafone is in breach of the investment treaty agreement between India and the Netherlands.
The heavily indebted telecoms firm had won some reprieve earlier this month as the Supreme Court gave mobile carriers 10 years to settle the government dues, but the company’s longer-term problems are not over.The court has now set a deadline of 31st March, 2031 to pay the amount in annual installments.