British telecommunications giant Vodafone said on Friday it had offered to settle a multibillion-dollar tax dispute with India after the government repealed a law that required it to demand huge sums from multinational companies.
The legislation, introduced in 2012, allowed New Delhi to recover taxes from foreign companies that had purchased assets of Indian companies in previous transactions.
It was called “fiscal terrorism” by the then BJP – which is now in power – and widely seen as damaging India’s pressure to attract more foreign investment.
Large companies, including Vodafone and British oil producer Cairn Energy, have successfully challenged the tax claims in international arbitration tribunals, although New Delhi has refused to accept the rulings.
He finally repealed the legislation in August, and he is expected to return the taxes he collected if companies agree to withdraw their legal claims and not sue for damages.
Vodafone confirmed in a statement sent to AFP that it had filed a request for settlement of the dispute.
“We have always been convinced that no tax liability has been imposed in respect of our acquisition of the Indian company, and this has been confirmed by the decisions of the Indian Supreme Court and the International Court of Arbitration “said a spokesperson.
The dispute arose out of the UK telecommunications giant’s acquisition of one of India’s largest mobile operators, Hutchinson Essar, as part of a deal in 2007.
New Delhi had claimed some 200 billion rupees ($ 2.7 billion) in previous taxes, according to a Bloomberg News report in August.
A few Rs. The 447 million ($ 5.9 million) the government has collected from Vodafone so far is expected to be repaid, The Economic Times reported on Friday.
All 17 companies affected by the retroactive tax law have requested refunds, the newspaper added.
Scottish company Cairn Energy said in early November that it would end its tax dispute with India to allow reimbursement of Rs. 79 billion ($ 1.06 billion) collected from the company.