The Indian government has time till the last week of December to appeal against the verdict
of an arbitration panel that scrapped levy of Rs
22,100 crore tax on the UK-based telecom firm Vodafone Group Plc using a retrospective law.
Finance Secretary Ajay Bhushan
Pandey, refusing to be drawn into discussion on former
Finance Minister Arun Jaitley's
promise to honour awards in retrospective tax cases,
said the government is examining all aspects to arrive at a decision on whether
to appeal against the Voda award.
"We are still examining various
aspects and a decision would be taken in due course," Pandey told .
Asked if there is a time limit on
the decision to file an appeal, Pandey said, "All arbitration orders if at
all have to be appealed, have a time limit of 90 days. So, we have time to
decide, so will decide."
Jaitley as the Finance Minister of Modi-1.0
government on several occasions had stated that the BJP government will not raise any new
demand using the retrospective tax legislation and will honour
arbitration awards in cases where companies had challenged tax demands raised
by the previous regime using the controversial retrospective tax legislation.
Vodafone had challenged before the
arbitration tribunal India's usage of a 2012 legislation that gave the
government powers to retrospectively tax deals like
Vodafone's USD 11-billion acquisition of 67 per cent stake in the mobile phone
business owned by Hutchison Whampoa in 2007.
It challenged the demand of Rs 7,990 crore in capital gains taxes (Rs
22,100 crore after including interest and penalty) under the Netherlands-India
Bilateral Investment Treaty (BIT).
The arbitration tribunal had said
India's "conduct in respect of the imposition" of tax demand on Vodafone "notwithstanding the Supreme
Court judgement is in breach of the guarantee of fair and equitable
treatment" in the bilateral investment protection treaty.
As per the award, the government has
to reimburse Vodafone 60 per cent of its legal costs
and half of the 6,000 euros cost borne by Vodafone for appointing an arbitrator
on the panel. Sources said the Government of India's liability will be restricted to about Rs 75
crore in cost refunds.