Chidambaram stated that, an amendment to the Income Tax Act is inevitable. However, it would require considerable amount of time to get implemented.
British telecom giant Vodafone is involved in an Rs 11,000 crore ($2.2 billion) tax dispute with Indian authorities related to $11 billion acquisition of mobile assets from Hongkong based Hutchison Whampoa in 2007.
Chidambaram said that the priority at this moment is to find a possible solution to the Vodafone dispute and then urge the Parliament to amend the Act.
Vodafone had earlier won a tax case in the Supreme Court, which was opposed by the Indian government who amended the Income-tax Act and appealed to undo the ruling. The Income Tax Department issued a letter in January to Vodafone International Holdings BV stating that the company is required to pay tax amounting to Rs 11,217 crore along with interest. Vodafone disagreed to India’s demand and wanted to take the matter to international arbitration. However, the company later offered conciliation on the issue which is still under consideration of the Union Cabinet.