Govt to collect tax in Rs 20,000 cr dispute with Vodafone

February 11, 2014 20:22

The Centre has decided to withdraw its conciliation proposal to telecom giant Vodafone over a Rs. 20,000-crore tax dispute.

This means that the tax department will now move to collect the dues from the company. The finance ministry has floated a Cabinet note seeking to withdraw the conciliation process with Vodafone International Holdings BV, sources said.

The Cabinet had in June last year approved the ministry's proposal to go in for conciliation with Vodafone to resolve the capital gains tax dispute related to its acquisition of Hutchison Whampoa's stake in Hutchison Essar in 2007.

Sources said talks collapsed because the company dilly-dallied on fine print. Vodafone, they said, wanted to club a Rs 3,700 crore transfer-pricing case of Vodafone India Services with the capital gains tax issue, a demand that the finance ministry did not accept.

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