Vodafone Controversy: An Introduction
One of the most controversial areas in taxation under the Indian Income Tax Act, 1961 (“the Act”) in recent days has been the Vodafone tax controversy. Several important questions of law in the area of taxation of non-residents – pertaining to both chargeability and machinery provisions – are at issue in the Vodafone controversy. The Bombay High Court in its recent judgment in Vodafone has commented on the merits of some of these issues (please see Vodafone International Holdings BV v. Union of India , WP No. 2550 of 2007 (Bombay High Court) . The case provides a useful backdrop for anchoring the theoretical arguments on the taxation of non-residents. For a detailed discussion of the theoretical arguments, reference may be made to Geoffrey Loomer, ‘The Vodafone Essar Dispute’ (2009) 21 (1) National Law School of India Review 89. In the following couple of posts, I will look at the various arguments on both sides o...