Vodafone Group Plc-govt case: Govt may have to shell out Rs 85 cr if it decides not to appeal

Rs 85 crore — this would be the Centre’s liability should it decide to not appeal against Friday’s ruling of the Permanent Court of Arbitration in the Rs 22,100-crore tax dispute with Vodafone Group Plc. The arbitration tribunal ruled in favour of Vodafone Group against India’s retrospective demand of capital gains tax. Of the Rs 85-crore outgo, Rs 45 crore will be towards the tax collected from Vodafone so far and Rs 40 crore, or 4.3 million pound sterling, towards the administrative cost charged by the tribunal.

According to Finance Ministry sources, since Vodafone had not paid the initial tax demand of Rs 7,900 crore and interest and penalty on it, the question of India paying back Rs 22,100 crore did not arise. Further, the tribunal has not accepted the claim of Vodafone for award of damages, sources added.