'Vodafone to start start tax pre-conciliation talks with govt'

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The British telecom major is facing a tax liability of over Rs 11,200 crore. Reuters The British telecom major is facing a tax liability of over Rs 11,200 crore. Reuters
SummaryThe British telecom major is facing a tax liability of over Rs 11,200 crore.

Faced with over Rs 11,200 crore tax liability, Vodafone India chief Analjit Singh today said the company will start the pre-conciliation talks with government to settle the dispute.

"Yes the (pre-conciliation) talks will start," Singh told reporters after meeting Finance Minister P Chidambaram.

He, however, refrained from giving a timeline for the talks to begin.

While Vodafone has selected its senior official Mathew Kirk, Government has from its side selected law Secretary P K Malhotra to begin the pre-conciliation talks.

The British telecom major is facing a tax liability of over Rs 11,200 crore, along with interest, on its 2007 acquisition of Hutchison Whampoa's stake in Hutchison Essar.

Vodafone had earlier expressed its keenness to reach an amicable settlement on the matter.

Vodafone had offered to settle the dispute through conciliation to which government agreed, but there are differences over the rules under which it would take place.

While the British telecom major has indicated its preference for conciliation under the United Nations Commission on International Trade Law (UNCITRAL), India has proposed settlement under the Indian Arbitration and Conciliation Act.

Singh, however, did not comment under which laws he would like the conciliation to begin.

The Supreme Court last year had ruled in Vodafone's favour, saying the British company was not liable to pay any tax over its 2007 acquisition of mobile phone assets in India.

The government later that year changed the rules to enable it to make retroactive tax claims on already-concluded deals, drawing criticism from global business groups.

Following amendment to to I-T Act 1961 last year, the Income Tax Department had issued a letter in January to Vodafone International Holdings BV stating that the company is required to pay the tax.

Vodafone replied saying that they do not owe anything to the Indian Government. Vodafone earlier wanted to take India to international arbitration but later offered conciliation on the issue.

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