No Vodafone accord till tax law allows settlement mechanism
Besides the Vodafone-Hutch tax dispute, other big cases that cannot go forward in the absence of a formal dispute resolution process include Nokia where, sources say, a R13,000-crore tax demand is in the process of being served for alleged transfer pricing violations; a R3,500-crore dispute with Vodafone over the demerger of its passive infrastructure assets to Indus Towers; and a R8,500-crore transfer pricing adjustment of R8,500 crore also involving Vodafone where the tax demand could be about R2,600 crore.
The high-profile transfer pricing adjustment over the purchase of Shell India’s shares by parent Shell that hit the headlines on Monday with Shell India chairperson saying Shell plans to challenge the order “strongly” also falls in the same category. Shell officials will be meeting the DG International Taxation to discuss the matter on Friday.
Sources say the Vodafone-government discussions are centred around the format in which the negotiations are to take place – this will include putting in place a legal structure for a formal settlement. Since Vodafone believes it is on strong legal footing, sources say the telco is looking to get some relief on its other pending tax disputes if it is to pay any part of the Rs 11,200 crore tax liability. Sources say it is unlikely the negotiations can be finished before
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