Despite SC ruling, Vodafone unlikely to evade taxman

Having lost its review petition before the Supreme Court on Tuesday, the government is now relying on the amendments to the finance bill pending before Parliament to make British telecom operator Vodafone to pay tax of over Rs11,000 crore on its 2007 deal with Hutchinson Whampoa.

''They (Vodafone) will have to automatically pay the tax after approval of the amendments to the Finance Bill by Parliament. We don't need to send a fresh tax demand notice to them,'' PTI cited a finance ministry official as saying (See: Bent on taxing Vodafone, govt to change laws).

However another report in The Times of India cited finance ministry officials to say the revenue department is ready with a plan to issue a new demand notice on Vodafone.

 The officials said that the tax department will issue a notice to Vodafone within 45 days of the passage of the Finance Bill, which is expected to get parliamentary approval in May and have retrospective effect.

Meanwhile the government on Tuesday refunded Rs2,500 crore along with 4 per cent interest to Vodafone following the dismissal of its review petition against the 20 January order by the Supreme Court in favour of Vodafone. (See: Government to refund Rs2,500 crore to Vodafone: Salman Khurshid)

The British company has maintained that since it was an overseas deal between two foreign companies, no tax is payable to the Indian authorities. The Supreme Court, going by the letter of the law, has upheld its stand.