Telecom giant Vodafone on Friday won a significant ruling against the Indian government in an international court over Rs 20,000 crore in dues which it had described as unfair.
The international arbitration tribunal in The Hague 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, sources told news agency Reuters.
The tribunal, in its ruling, said the government must cease seeking the dues from Vodafone and should also pay over Rs 40 crore to the company as partial compensation for its legal costs, the source said.
Vodafone and India’s finance ministry did not immediately respond to a request for comment.
The tax dispute involving Rs 12,000 crore in interest and Rs 7,900 crore in penalties stems from Vodafone’s acquisition of the Indian mobile assets from Hutchison Whampoa in 2007. The government said Vodafone was liable to pay taxes on the acquisition, which the company contested.