An Inter Ministerial Group (IMG) has finalised the reply to the Vodafone's notice under the Bilateral Investment Protection Agreement (BIPA). The reply will be sent soon.
A senior Government official said, “The IMG in its meeting discussed the draft reply. It felt that Vodafone's notice was too premature.” The IMG, headed by the Finance and Revenue Secretary, Mr R.S. Gujaral, focused on section 4 and 5 of BIPA for finalising the draft.
In its earlier meeting on May 11, the IMG had opined that though it was not an obligation on the part of the Government to give reply to such a notice, the Government did not want anybody to raise questions.
The Government's reply deals with not just the 24 points raised in the notice, but some other issues too.
Vodafone had given notice asking a question on framing retrospective legislations.
The Finance Bill, passed in the Lok Sabha earlier this week, has provision for retrospective amendment. Vodafone's tax liability is estimated at around Rs 20,000 crore as a result.
The official also said that BIPA between India and The Netherlands does not have anything on tax. Secondly, the Government feels there is no dispute and if Vodafone thinks there is dispute, it is not according to BIPA.
Thirdly, BIPA clearly says that if there is a dispute, it needs to be settled amicably. “We are working on that,” he added.