India sends Vodafone $2.5b tax bill

Dylan Bushell-Embling & Michael Carroll
25 Oct 2010
00:00
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Daily News

Vodafone has been given 30 days to pay $2.5 billion in tax to the Indian government, and is under pressure to pay billions more it is accused of withholding in the UK.

Indian tax authorities calculate that Vodafone owes just under 113 billion rupees ($2.5b) in back-taxes for its 2007 acquisition of Hutchison’s stake in Essar.

The income tax department issued a bill for 112.18 billion rupees Friday, ahead of the opening of Vodafone’s supreme court appeal against the tax bill today.

It gave the carrier a month to stump up the cash, the Times of India reported.

India’s supreme court demanded that the sum owed be calculated ahead of the trial, and told Vodafone it would have to pay a deposit to stay a lower court ruling that the operator is liable for the tax.

Vodafone said the tax calculation was wrong, maintaining its stance that the sale is not subject to Indian tax because it was conducted offshore, and that as the acquirer it made no income on the deal, the Times said.

The figure demand came in at the high end of analysts’ predictions, according to the Financial Times.

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