Attorney General G E Vahanvati has reportedly given a go ahead to the finance ministry for collecting tax dues from British Telecom giant Vodafone.

The Vodafone taxation issue emerged after the government moved to make amendment relating to the retrospective taxation in the Income Tax Act. Finance Minister Pranab Mukherjee is backing the proposed changes to the Income Tax Act with retrospective effect, which could once again open the Vodafone tax case making company liable to pay about Rs 11,000 crore as tax for an acquisition deal.

Global business chambers including Confederation of British Industry, U. S. Council for International Business and Japan Foreign Trade Council have written a letter to the Indian PM with their concerns over the proposed changes to the law.

The country's highest court had said in a ruling that the British telecom giant has no dues to pay to the Indian taxation authorities. The company's court victory in a case, lasting more than four years, came as the Supreme Court dismissed the government's demand for $2.2 billion in taxes from Vodafone for its acquisition of Hutchison Whampoa Ltd's India operations in 2007.

The court victory was left without meaning after the government decided to make amendments to the laws. Vodafone Group might now have to pay more than $2 billion in taxes. as the government changes laws that govern taxation.