Vodafone Offers to Settle Multi-Billion-Dollar India Tax Row

British telecom giant Vodafone on Friday said it had offered to settle a multi-billion dollar tax dispute with India after the government struck down a law in which it claimed huge sums of money from multinationals.

The law, introduced in 2012, allowed New Delhi to withhold tax from foreign companies that had bought assets of Indian firms in previous deals.

It was dubbed “tax terrorism” by the then opposition BJP – which is now in power – and is widely seen as harming India’s push to attract more foreign investment.

major firms including vodafone and British oil producer Cairn Energy successfully challenged the tax claims in international arbitration tribunals, although New Delhi declined to accept the rulings.

It eventually repealed the law in August, and is expected to refund the taxes it collected if the firm agrees to withdraw its legal claims and does not sue for damages. Huh.

Vodafone confirmed in a statement emailed to AFP that it had filed an application to settle the dispute.

A spokesperson said, “We have always been convinced that no tax liability arises in relation to our acquisition of Indian business, and this arose out of the decisions of the Supreme Court of India and the International Court of Arbitration.”

The controversy arose with the acquisition of Hutchinson Essar, one of India’s largest mobile phone operators, by the British telecom giant in a 2007 deal.

According to a Bloomberg News report in August, New Delhi claimed nearly 200 billion rupees ($2.7 billion) in past taxes.

Some Rs. The Economic Times reported on Friday that Vodafone was expected to refund 447 million ($5.9 million) collected by the government so far.

The paper said all 17 companies affected by the retrospective tax law have applied for refunds.

Scottish-based Cairn Energy said in early November that it would end its tax dispute with India to allow a refund of Rs. 79 billion ($1.06 billion) was collected from the firm.