India examining international arbitration award in Vodafone tax dispute, says government official

FILE PHOTO: Different types of 4G, 5G and data radio relay antennas for mobile phone networks are pictured on a relay mast operated by Vodafone in Berlin, Germany April 8, 2019. REUTERS/Fabrizio Bensch/File Photo

NEW DELHI (Reuters) - India is examining the international arbitration decision on tax dispute with Vodafone Group Plc, involving a $2 billion tax claim, but has not yet decided whether to challenge it in court, a government official said on Tuesday.

An international arbitration tribunal in The Hague had ruled last month that India’s imposition of a tax liability on Vodafone, as well as interest and penalties, breached of an investment treaty agreement between India and the Netherlands.

“International arbitration decision is based on bilateral investment treaty that can not curb the sovereign power of taxation,” the government official, who declined to be named, told reporters.

Vodafone did not immediately respond to a request for comment.

Reporting by Aftab Ahmed; Additional reporting by Sankalp Phartiyal, Writing by Manoj Kumar, editing by Louise Heavens