{"id":1393,"date":"2013-06-07T12:39:39","date_gmt":"2013-06-07T07:09:39","guid":{"rendered":"http:\/\/www.itatonline.org\/articles_new\/?p=1393"},"modified":"2013-06-07T12:46:38","modified_gmt":"2013-06-07T07:16:38","slug":"vodafone-is-a-tax-dodger-dont-spare-it-t-k-arun","status":"publish","type":"post","link":"https:\/\/itatonline.org\/articles_new\/vodafone-is-a-tax-dodger-dont-spare-it-t-k-arun\/","title":{"rendered":"Vodafone Is A Tax Dodger – Don’t Spare It: T. K. Arun"},"content":{"rendered":"
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Vodafone Is A Tax Dodger – Don’t Spare It: T. K. Arun<\/p>\n

Editorial Team
\nThe author, an eminent columnist, is irked that instead of taking steps to recover the tax of Rs. 19,000 crore that Vodafone sought to evade by adopting unfair means, the Government is actually thinking of sparing Vodafone of that liability. He argues that the Government is acting out of the misplaced fear that being firm with tax dodgers will prove detrimental to the Country. Instead, the Country will benefit if tax is recovered from Vodafone, he says <\/p>\n<\/div>\n

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The controversy over whether the Government should spare Vodafone of the tax of Rs. 19,000 crore that the retrospective amendment seeks to recover from it has polarized the intelligentsia. While, on the one hand, Ex Chief Justice S. H. Kapadia<\/a> has spoken out in favour of Vodafone and suggested that if the Government is harsh on Vodafone, thousands of jobs could be jeopardized, on the other hand, (late) Ex Chief Justice J. S. Verma<\/a> had expressed the view that Vodafone had attempted to evade taxes and should not be spared.\n<\/div>\n

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Across the Globe, the mood against big multinational corporations which seek to escape tax by transferring the bulk of their income to low tax jurisdictions has become hostile. The US and UK tax authorities are going after big corporates like Google and Apple which are paying very less tax in their home countries despite earning huge profits<\/p><\/div>\n

Now, T. K. Arun, editor of the Economic Times, has come out strongly against Vodafone and the Government’s efforts to go soft on it. In a hard-hitting article<\/a>, he points that across the Globe, the mood against big multinational corporations which seek to escape tax by transferring the bulk of their income to low tax jurisdictions has become hostile. The US and UK tax authorities are going after big corporates like Google and Apple which are paying very less tax in their home countries despite earning huge profits. <\/p>\n

Even the OECD and the G20, which are made up of rich countries, are seeking to ensure that the laws are tightened so that the loopholes in the law which enable illegitimate tax planning are plugged. <\/p>\n

Vodafone itself, in another transaction executed in the UK, had to pay $1.7 billion as a negotiated settlement to the British government for seeking to avoid taxes, T. K. Arun points out. <\/p>\n

So, when the UK Government did not spare Vodafone, why should the Indian Government spare Vodafone, he asks. <\/p>\n

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Collecting taxes from Vodafone would make India a more attractive a place to invest in because it will show that the Government has the sense, authority and the will to act against big tax dodgers operating from tax havens and will also reduce the fiscal deficit and improve macroeconomic balance<\/p>\n<\/div>\n

The learned editor also argues that there is no doubt that the transaction entered into by Vodafone attracted tax and that Vodafone ought to have deducted taxes thereon instead of seeking to avoid its liability by creating a subterfuge. He emphasizes that the judgement of the Supreme Court<\/a> holding to the contrary is wrong and he endorses ex-CJI J. S. Verma<\/a>‘s criticism that the judgement “had sanctified illegitimate tax avoidance by adopting a subterfuge<\/em>“. <\/p>\n

T. K. Arun also points out that the Government’s action in enacting retrospective amendments to supersede the judgement of the Supreme Court is in accordance with the settled practice around the world to make use of retrospective changes to the law if unambiguous entitlement to tax is rendered ambiguous by faulty legal articulation. <\/p>\n

The argument that if taxes are collected from Vodafone pursuant to the retrospective amendment, the world would shun India and that thousands of jobs would be put in jeopardy is treated with contempt by T. K. Arun. It is a “delusional argument<\/em>” and one that “wallows in an unbecoming sense of inferiority<\/em>” he says. <\/p>\n

He adds that, instead, collecting taxes from Vodafone would make India a more attractive a place to invest in because it will show that the Government has the sense, authority and the will to act against big tax dodgers operating from tax havens and will also reduce the fiscal deficit and improve macroeconomic balance. <\/p>\n

So, given that the mood and the climate, globally, is against permitting tax evaders to escape, the Government does not have to treat Vodafone with kid gloves or feel nervous about asking tax dodgers to pay up, says the author. <\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The author, an eminent columnist, is irked that instead of taking steps to recover the tax of Rs. 19,000 crore that Vodafone sought to evade by adopting unfair means, the Government is actually thinking of sparing Vodafone of that liability. He argues that the Government is acting out of the misplaced fear that being firm with tax dodgers will prove detrimental to the Country. Instead, the Country will benefit if tax is recovered from Vodafone, he says<\/p>\n

Read more ›<\/a><\/div>\n

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