Vodafone Case: Government Decision to Lift Sentiment, Says Industry

Vodafone Case: Government Decision to Lift Sentiment, Says Industry

New Delhi: The government's decision to not appeal against a high court order in the Vodafone tax case will help in correcting perception about the Income Tax Department and lift global investors' sentiment, industry said on Wednesday.

"We believe that it is a very appropriate decision and this will go a long way in correcting the perception of the tax administration being adversarial. It will help in creating a conducive tax environment, especially for the overseas investment community," Ficci secretary general Didar Singh said.

"This decision will also help in uplifting the positive sentiments of the domestic industry further," he added.

The decision on Vodafone clearly demonstrates courage on the part of government to resolve issues upfront, Assocham secretary general D S Rawat said.

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"It will lead to a big lift in sentiment among global investors," he said.

In a significant development, the government earlier on Wednesday decided not to appeal against a Bombay High Court ruling that Vodafone was not liable to pay tax demand of Rs 3,200 crore in a transfer pricing case.

The High Court in its October 10, 2014 order had given a big relief to the UK-based mobile service provider by ruling that it is not liable to pay an income tax demand of Rs 3,200 crore in a case relating to transfer pricing.