Another blow to Vodafone in tax case

Dylan Bushell-Embling
28 Sep 2010
00:00
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Daily News

Vodafone will have to front up at least some of its estimated $2.7 billion tax bill over the acquisition of Vodafone Essar while it appeals the order in the Indian supreme court.

The court gave the income tax department until the next hearing on October 25 to calculate the exact sum it believes Vodafone owes from the 2007 transaction.

The bench told Vodafone it will have to pay a deposit on the tax demand if it wants a stay on the lower-court ruling while the case is heard, The Telegraph Indiasaid.

The total tax bill is estimated at 120 billion rupees ($2.7b), including 85 billion in capital gains tax and 35 billion in interest. Vodafone could also face a fine for failure to deduct the tax.

But Vodafone is not giving up on the fight. The company said in a statement that it maintains its belief that the transaction is not taxable, and that as the buyer it made no capital gains on the sale.

“We will continue to take whatever actions necessary to defend Vodafone's position as the matter proceeds,” the statement added.

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