New Delhi, Sept 25: Vodafone Group Plc has won an international arbitration case against the Indian government in a ₹14,200 crore retrospective tax dispute, according to two sources with direct knowledge of the matter.
The tribunal ruled that the Indian government's imposition of a tax liability on Vodafone is in breach of the investment treaty agreement between India and the Netherlands, one of the sources said.
The British telecom giant moved the Hague-based International Court of Justice (ICJ) in 2016.
Vodafone in 2013 had invoked India-Netherlands bilateral investment treaty seeking resolution to the tax demand imposed on it by enacting a tax law with retrospective effect to sidestep a Supreme Court judgement that went in the company’s favour.
Conciliatory proceedings were initiated to resolve the dispute but differences led to a breakdown following which arbitration was initiated.
The government had initially slapped a tax demand of ₹7,990 crore on Vodafone for failing to deduct tax on capital gains made over its $11-billion acquisition of 67% stake in the mobile phone business owned by Hutchison Whampoa in 2007.