The Central Government has said that the order of the International Arbitration Court in the Vodafone case encroaches on its sovereign tax. This is unacceptable and the order cannot be fixed immediately. In the case, sources said that the government can challenge the order in which the India-Netherlands bilateral investment protection agreement has been violated. A senior officer said that the final consideration is yet to be taken on the basis of legal opinion.
However, a source said that India is against retrospective taxation. The bilateral investment agreement is for the protection and facilitation of investment. It has nothing to do with the tax policy. Another officer indicated that the government could challenge the order in the Singapore High Court. It may be noted that last month, Britain's telecom company Vodafone had won the International Arbitration Court in its old tax dispute case with the India Government.
The case relates to a tax demand of Rs. 22,100 crore from the company. The International Arbitration Tribunal had ruled that the demand for tax from India's previous date is against fair treatment under the bilateral investment protection agreement between the two countries. "Vodafone confirms that the Investment Treaty Tribunal found the case in favor of Vodafone," the British company said in a statement. This is a decision taken with general approval, including India-appointed mediator Rodrigo Oremuno.
Also Read-
Share market in red mark today, Sensex falls
