The Dutch government is trying again to get the Indian government to compromise on the massive tax demand on British telecom major Vodafone, say television reports.
I-T department has fixed Rs 12,000-crore (Rs. 120 billion) tax claim on the 2007 deal in which Vodafone bought Hutch's 67 per cent stake in Hutchison Essar for $11.2 billion. The matter has gone from one court to another and is presently before the Supreme Court.
The tax authorities say Vodafone is liable to pay capital gains tax, as the assets in question are based in India. Vodafone says Indian revenue authorities have no jurisdiction, since the deal was done between two foreign entities.
The Dutch government is interested since
the deal was done between Hutchison Telecom International's holding company, CGP, based in the Cayman Islands, and Vodafone International Holdings BV, situated in the Netherlands.
VIHBV is a wholly owned subsidiary of Britain-based Vodafone Plc.
Earlier, it had approached the Indian government for an out-of-court settlement, but was rebuffed. It is now trying again.
Asked to respond, a Vodafone spokesperson in Britain said: "This development is between the Dutch and the Indian government and does not directly involve Vodafone, even though the tax case is about Vodafone. It would not be appropriate for us to comment on an inter-governmental negotiation."