New Delhi: Telecom company Vodafone Essar Ltd on Thursday moved a step closer to winning a tax dispute, with an appellate authority staying the customs department’s claim of duty evasion against the telco.
The Customs Excise and Service Tax Tribunal (Cestat) granted a stay on the customs department’s levy of a duty of Rs9.73 crore on Vodafone for alleged under-reporting, according to the website taxindiaonline.com.
“It (Cestat) has given an indication the case is moving in favour of Vodafone,” said Anita Rastogi, principal consultant at audit and consulting firm PricewaterhouseCoopers. Vodafone declined to comment on the tribunal’s decision.
Typically, cases going to Cestat pass through two stages. In the first stage, the tribunal decides whether an applicant’s case has merit. If the tribunal feels the applicant has a weak case, it is generally asked to pay a certain part of the demand. In Vodafone’s case, it was not asked to make the payment.
“Typically, the trend is if you are not asked to make the payment, most probably the case is moving in your favour,” said Rastogi.
The next stage of the hearing is scheduled to be held in July.
Vodafone imported mobile telephone equipment, including base trans-receiver stations, base station controllers and mobile switching centres. To avoid paying duty, the company deliberately did not disclose that the equipment came with essential software, alleged the customs department.
Before Vodafone appro-ached the tribunal, the relevant adjudicating authority levied a duty of Rs9.73 crore on Vodafone and another Rs1 crore to redeem confiscated equipment.