"I have said quite a number of times that I want the issue (to be) resolved...I told Vodafone when they met me that I want to resolve it, if you want to resolve it let's find a way out. I think we will find a way out," he said in a TV interview.
The tax department had issued a letter in January to Vodafone International Holdings BV stating the company is required to pay a tax demand of about Rs 11,217 crore besides interest.
However, Vodafone replied back saying that they do not owe anything to the Indian government.
The telecom firm had earlier wanted to take India into international arbitration, but after discussions with Indian government, it offered conciliation on the matter.
"We rejected arbitration, so Vodafone has now offered conciliation. The matter will now go to the Cabinet," Chidambaram said and added that conciliation is not binding.
Vodafone is facing the tax liability for purchase of Hongkong-based Hutchison Whampoa's stake in Indian telecom business Hutchison Essar in 2007.
On retrospective amendment to Income Tax laws, he said that once the Vodafone issue is resolved and "that is put behind us, we can always move the amendments necessary that will reflect the Shome committee recommendations".
The amendment to Income Tax Act, 1961 with retrospective effect has been passed by Parliament.
The retrospective amendment was made to undo the Supreme Court judgement that was ruled in favour of Vodafone.