Vodafone Tax Arbitration Case: Decoded! Know the amount that Centre has to pay

Vodafone Tax Case Arbitration: Vodafone has won the case at the Permanent Court of Arbitration (PCA) in The Hague over the retrospective tax demand, with the court holding that the conduct of India`s tax department is in breach of "fair and equitable" treatment. After this verdict, the government may have to pay a total of Rs 85 crore to the telecom operator company Vodafone, in case it decides not to take any further legal recourse in the Vodafone Arbitration Case of over Rs 20,000 crore, sources said. 

Fin Min sources told Zee Business that there is no question of India losing Rs 20,000 crore in Vodafone tax case as reported in some sections of media. There is a wrong impression that government will  have to return Rs 20,000 crore because of this award.

In fact, the Tribunal has not accepted the claim of Vodafone for award of damages.

The Finance Ministry said that the court has asked the government to pay only 4.3 million pounds, or about Rs 40 crore, which is 60 per cent of the tribunal`s administrative cost while the rest 40 per cent would be borne by Vodafone. Also, the government may have to refund the tax collected, which is about Rs 45 crore, only if it does not go for appeal against the award. Therefore, the total outgo would be around Rs 85 crore only.

Also, government will examine order carefully and take appropriate action after obtaining legal opinion.

See Zee Business Live TV streaming below:

The Finance Ministry, in a statement, said that the government will take a decision on further course of action, including legal remedies, among other options after studying the award and consulting with its counsel on the matter.

"After such consultations, the Government will consider all options and take a decision on further course of action, including legal remedies before appropriate fora," said the official statement.