Cabinet nod for tax on Vodafone in a week

The income tax department is waiting for the Cabinet to formally endorse the finance ministry’s proposal to call off the conciliation talks with Vodafone relating to the Rs 20,000-crore tax dispute over the company’s acquisition of Hutchison’s 67 per cent stake in Hutch-Essar in 2007.

“The Cabinet has to take a call on whatever step is to be taken next,” finance secretary Sumit Bose, said, when asked about the mode of recovering the disputed tax demand.

The development is likely to kick off another round of litigation between the two sides. Sources in the government said the tax department will initiate steps to recover the tax as soon as the Cabinet endorses the proposal, likely in a week’s time.

The department is preparing to inform Vodafone that the retrospective amendment to the I-T Act in 2012 has reinstated the Rs 20,000-crore tax demand arising out of its 2007 purchase of Hutch-Essar. fe