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The Permanent Court of Arbitration in Hague has ruled in favour of the Vodafone Group against the income tax department of India in a long pending arbitration case of US$2 billion tax dispute on a retrospective basis. In the ruling, the international court mentioned that the imposition of a tax liability along with interest and penalties by the Indian tax department was in breach of 'guarantee of fair and equitable treatment' of the terms laid out in the bilateral investment treaty (BIT) agreement between the Netherlands and India.
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