"When an Indian company goes to England, it pays taxes. Pharma companies pay taxes in the US. The Prime Minister has said taxes cannot be levied on retrospective basis. But tax liability issue still remains. They are saying the case is in arbitration. We are trying to find a way to resolve this
issue," he said.
     
He added that it was not right to gauge the country's economic capability by limiting it to the Vodafone case. On February 4, the I-T department issued Vodafone a reminder over its Rs 14,200-crore tax demand and threatened to seize assets in the case of non-payment.
     
The notice, sent to Vodafone International Holdings BV, said the dues are in relation to its USD 11 billion acquisition of Hutchison Whampoa's India telecom business in 2007.

The British telecom major has disputed the tax demand over its acquisition of 67 per cent stake in Hutchison, now called Vodafone India, arguing that no tax was due as the transaction was conducted offshore.
    
But the tax department's contention is that capital gains were made on assets in India. The issue is under international arbitration.
     
Vodafone strongly reacted to the tax reminder saying it represented 'a complete disconnect between the government and the tax department' and ran contrary to Prime Minister Narendra Modi's promise of tax-friendly environment for foreign investors.