Vodafone
Vodafone

India has challenged in Singapore an international arbitration court’s verdict against it over a $2 billion tax claim involving Vodafone Group Plc, said reports on Thursday quoting a senior government official on condition of anonymity.

The issue is being watched closely after a fresh disappointment for the income tax department in the Cairn Energy case, which has also ruled that the governments retrospective action – piloted by the foreign tax division of the income tax department- violated its commitment to fair and equitable treatment under the bilateral investment protection treaties.

On their part, revenue officials have argued that rulings by international tribunals cannot over-ride the sovereign powers of the legislature in framing tax policies, Reuters said in its report.

It is pushing this argument to seek a review of the Vodafone ruling in Singapore, pointing to a case involving an African country’s battle with global mining giants.

In a major setback on Wednesday, the Indian government has lost arbitration case to energy giant Cairn and has been asked to pay damages worth Rs 8000 crore to the UK oil major. The verdict, which came late night on Tuesday, comes three months after India lost arbitration to Vodafone over the retrospective legislation.

The government will consider all options including legal recourse after studying the award passed by tribunal in the arbitration case by Cairn Energy Plc, the finance ministry said in a statement on Wednesday.

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