Vodafone, Cairn eligible for settling disputes under tax amnesty scheme


By Shruti Srivastava and Vrishti Beniwal

Vodafone Group Plc and Cairn Energy Plc are eligible to settle a tax dispute with India’s government under a new amnesty program, a senior government official said.

The companies will need to pay their taxes by March to benefit from the interest and penalty waivers under the program, Pramod Chandra Mody, chairman of the Central Board of Direct Taxes, said in an interview Tuesday.

“We are trying to see to it that the litigation is kept to barest minimum,” Mody said, adding that “if they wish to come, they are welcome.”


Vodafone’s dispute relates to its $11 billion acquisition of a 67% stake in the mobile-phone business owned by Hutchison Whampoa, now part of CK Hutchison Holdings Ltd., in 2007, while Cairn Energy is contesting a big tax bill — $1.6 billion plus interest and penalties — that New Delhi raised for a 2006 transaction. Finance Minister Nirmala Sitharaman this month proposed the amnesty program to pare an estimated 4,83,000 direct tax cases pending in various courts.

Spokespersons for Vodafone and Cairn didn’t immediately respond to separate emails seeking comment.

India’s latest program aims to recover a part of the about Rs 9.32 lakh crore ($131 billion) in taxes locked in disputes. That would help the government plug its budget deficit, the target for which was widened for the current and next fiscal years as an economic slowdown results in lower-than-expected tax collections.

The companies had previously rejected a similar offer in 2016, and instead sought to settle the disputes through the international arbitration mechanism.

With assistance from P R Sanjai and Debjit Chakraborty

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