The question mark over Vodafone Idea's survival is gone after the government's telecom package, managing director and chief executive officer Ravinder Takkar said in an interaction recently. The extended moratorium for spectrum payments and adjusted gross revenue (AGR) dues has indeed ensured that Vodafone Idea survives, at least for the time being, but questions remain. Answers to those questions may determine the future of Vodafone Idea and its power to stay in a difficult telecom market in the coming years.
Finance Minister Arun Jaitley, in his Budget speech on Monday, announced a new dispute resolution mechanism for such companies who are in confrontation with the taxman's action.
"If we are not getting anything then I think it is end of story for Vodafone Idea," Kumar Mangalam Birla said at the HT Leadership Summit when asked about the future of Vodafone Idea in absence of a government relief on payment of Rs 53,038 crore dues.
The Indian mobile market has been witnessing a rate war with the entry of new players
The sale of Essar Oil was India's biggest deleveraging exercise undertaken by any debt-heavy group
In effect, companies which put their money in telecom in India would have done much better to keep the cash in bank and earn interest.
To bring clarity, the department clearly defines terms such as promoter and competitor.
In order to determine whether this would be sound strategy for them, one needs to look at two issues: One, on the alliances being built globally between telcos, on one hand, and cloud service firms, on the other, especially with the advent of 5G; and two, how their business strategies in India will blend into with such a deal.
In the broader market, the BSE Midcap index bucked the trend to gain 0.3%
Following the October 24 Supreme Court order, the department of telecom estimated that the total liability of 15 telecom companies, including penalties and interest, would be Rs 1.47 lakh crore.
Finance Minister Nirmala Sitharaman on Friday indicated the government's intent to appeal against an arbitration panel asking India to return USD 1.4 billion to UK's Cairn Energy Plc, saying it is her "duty" to appeal in cases where the nation's sovereign authority to tax is questioned.
Cabinet will take a decision on a conciliation offer from Vodafone.
The retrospective tax controversy was highlighted by Vodafone, but Cairn Plc's continuing problems point to the impact this law has had on FDI in India's oil and gas sector.
The government will settle almost all the retrospective tax cases this month, closing a chapter that plagued India's reputation as an investment-friendly destination, a top official said on Friday. A 2012 amendment that gave taxmen powers to go back 50 years and slap capital gains levies wherever ownership had changed hands overseas but business assets were in India, was used to raise Rs 1.1 lakh crore demand against multi-nationals such as telecom group Vodafone, pharmaceuticals company Sanofi and brewer SABMiller, now owned by AB InBev, and Cairn Energy Plc. Such demands brought uncertainty in the minds of investors.
The high court court on Thursday accepted Nokia's appeal to release its local factory after its seizure by authorities in a tax dispute, removing a hurdle for the sale of the company's mobile phone business to Microsoft.
day after Finance Minister Nirmala Sitharaman announced a Rs 1 lakh crore spending package, a top government source said the Centre has not closed its options for another stimulus package.
India is believed to have challenged in a court in The Hague an arbitration tribunal verdict that overturned its demand for Rs 10,247 crore in back taxes from Cairn Energy Plc -- the second time in three months that it has refused to accept an international award against retrospective tax.
The market valuation of Reliance Industries, the country's most valued firm, is fast nearing the Rs 10 lakh crore mark, surpassing British energy major BP Plc.
At $12-bn valuation, this will be India's largest FDI; deal to be announced on Saturday, says Dev Chatterjee.
UK's Cairn Energy Plc has won an arbitration against the Indian government levying Rs 10,247 crore in retrospective taxes, the company said on Wednesday. The three-member tribunal, which also comprised a judge appointed by the Indian government, ruled that India's claim of Rs 10,247 crore in past taxes over a 2006-07 internal reorganisation of Cairn's India business was not a valid demand, sources said. The tribunal asked India to pay the funds withheld along with the interest to the Scottish oil explorer for seizing dividend, tax refund, and sale of shares to partly recover the dues.
AG is of the view that there is no point in dragging the matter further when it has already been "struck down" by one international forum, and also by the top Indian court.
Britain's Cairn Energy Plc has dropped lawsuits against the Indian government and its entities in the US and other places and is in the final stages of withdrawing cases in Paris and the Netherlands to get back about Rs 7,900 crore that were collected from it to enforce a retrospective tax demand. As part of the settlement reached with the government to the seven-year old dispute over levy of back taxes, the company - which is now known as Capricorn Energy PLC - has initiated proceedings to withdraw lawsuits it had filed in several jurisdictions to enforce an international arbitration award which had overturned levy of Rs 10,247 crore retrospective taxes and ordered India to refund the money already collected. Two sources with direct knowledge of the matter said Cairn on November 26 withdrew the lawsuit it had brought in Mauritius for recognition of the arbitration award and took similar measures in courts in Singapore, the UK and Canada.
The government on Thursday brought a bill in the Lok Sabha to withdraw all back tax demands on companies such as Cairn Energy and Vodafone and said it will refund the money collected to enforce such levies.
Arun Sarin is the chief executive officer of Vodafone Group Plc, the United Kingdom-based global mobile operator.
.jpg)
Moving quickly towards ending a retrospective tax dispute with a firm that gave India its largest oilfield, the government has accepted Cairn Energy PLC's undertakings which would allow for the refund of taxes, sources said. Meeting the requirements of the new legislation that scraps levy of retrospective taxation, the company had earlier this month given required undertakings indemnifying the Indian government against future claims as well as agreeing to drop any legal proceedings anywhere in the world. The government has now accepted this and issued Cairn a so-called Form-II, committing to refund the tax collected to enforce the retrospective tax demand, two sources with direct knowledge of the development said.
The levy of retrospective tax on the UK's Cairn Energy Plc is a tale of bizarre twists and turns that saw its attached shares being sold in May 2018 amid the passing of the baton from a full-time finance minister to interim one and the talks at the highest level to resolve the dispute, to claims that levy of back taxes was a result of an investigation into Panama Papers leak. The government late last month refunded about Rs 7,900 crore it had collected from selling residual shares of the British firm in its erstwhile India unit, seizing dividend and withholding tax refunds, to settle an eight-year-old dispute that had tarred the country's reputation as an investment destination. But, this did not come about easily. For seven years, the establishment vehemently justified in courts and outside seeking of Rs 10,247 crore in back taxes plus interest and penalty from a firm that gave India its biggest onshore oil discovery.
UK-based Cairn Energy PLC on Wednesday said it has agreed to drop litigations to seize Indian properties in countries ranging from France to the UK as it has accepted the Indian government's offer to settle tax dispute relating to the levy of taxes retrospectively. Meeting the requirements of new legislation that scraps levy of retrospective taxation, the company has given required undertakings indemnifying the Indian government against future claims as well as agreeing to drop any legal proceedings anywhere in the world. The government now has to accept this and issue Cairn a so-called Form-II, that will commit it to refund the tax collected to enforce the retrospective tax demand.
Cairn files notice against India in $1.6 billion tax dispute.
Faced with prospect of its assets across the globe being seized just like Pakistan and Venezuela, the government decided to scrap retrospective taxation but the international embarrassment could have been avoided had 'attached' shares of Britain's Cairn Energy Plc not been sold, according to tax and legal experts. On Thursday, the government introduced a Bill in Parliament to scrap the tax rule that gave the tax department power to go 50 years back and slap capital gains levies wherever ownership had changed hands overseas but business assets were in India. The 2012 legislation was used to levy a cumulative of Rs 1.10 lakh crore of tax on 17 entities, including UK telecom giant Vodafone, but substantial punitive action was taken only in the case of Cairn.
Arun Sarin, who recently retired as the Vodafone group CEO, is being considered for the post of chief executive of internet major Yahoo! Inc, the Wall Street Journal says.
Cairn India said it has always been fully compliant with all Indian income tax laws.
The Indian government has paid Cairn Energy Plc Rs 7,900 crore to refund taxes it had collected to enforce a retrospective tax demand, ending a seven-year-old dispute that had tarred the country's image as an investment destination. The company, which is now known as Capricorn Energy PLC, in a statement said it has received "net proceeds of $1.06 billion", of which nearly 70 per cent will be returned to the shareholders. The tax department had used a 2012 legislation, which gave it powers to go back 50 years and slap capital gains levies wherever ownership had changed hands overseas but business assets were in India, to seek Rs 10,247 crore in taxes from Cairn.
Transfer pricing tax orders of Income Tax against Shell and Vodafone pertain to alleged undervaluation of shares issued by their domestic subsidiaries to the parent companies abroad.
Courts in five countries including the US and the UK have given recognition to an arbitration award that asked India to return $1.4 billion to Cairn Energy plc - a step that now opens the possibility of the British firm seizing Indian assets in those countries if New Delhi does not pay, sources said. Cairn Energy had moved courts in nine countries to enforce its $1.4 billion arbitral award against India, which the company won after a dispute with the country's revenue authority over a retroactively applied capital gains tax. Of these, the December 21 award from a three-member tribunal at the Permanent Court of Arbitration in the Netherlands has been recognised and confirmed by courts in the US, the UK, Netherlands, Canada and France, three people with knowledge of the matter said.
While UK's Vodafone Group fights its tax liability in courts, British firm Cairn Energy Plc on Wednesday said it will pay all taxes due, both in India and the United Kingdom, on the $8.48 billion sale of a majority stake in its Indian arm to Vedanta Resources.
After Vodafone, UK-based Vedanta Resources Plc and Aditya Birla group firm Indian Rayon also face a potential tax demand of around Rs 900 crore and Rs 45 crore, respectively, for their failure to deduct taxes on payments to buy Indian assets, said a senior government official.
Top Indian private sector lender ICICI Bank, which owns nearly 68 percent of the insurer, is selling up to 181.34 million shares in the IPO.
UK-based Cairn Energy PLC on Tuesday said it will drop litigations to seize Indian properties in countries ranging from France to the US, within a couple of days of getting a USD 1 billion refund resulting from the scrapping of a retrospective tax law.
Cairn joins a slew of multinational firms including Vodafone Group Plc and Royal Dutch Shell Plc that have been slapped with retrospective tax demands by Indian authorities.
© 2026 Rediff.com - Investor Information - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances