The Central Government has opposed the verdict of the International Court of Arbitration Tribunal in favor of Vodafone. The Hague tribunal has ruled in favor of Vodafone in a Rs 20,000 crore tax case. The Central Government is preparing to take a stand against this verdict. The government had sought advice from Solicitor General Tushar Mehta on the International Tribunal’s verdict. Indications are that Tushar Mehta has given legal advice that the decision of the Dispute Tribunal should not contradict the law passed by the parliament of a country.
The tribunal ruled that Vodafone should suspend its tax collection and fines. The court also ordered the company to pay Rs 40 crore as costs. The central government had proposed to pay Rs 12,000 crore as tax arrears and Rs 7,900 crore as interest.
Vodafone’s tax arrears related to the 2007 acquisition of Hutch. The central government argued that the acquisition should be taxed. Vodafone then approached the Supreme Court and obtained a favorable verdict. However, after this, the central government passed a law to collect taxes from Vodafone and asked the company to pay the tax and arrears. Vodafone has approached the International Court of Justice (ICJ) against this.