Vodafone India chair slams tax law plan

Vodafone India chair slams tax law plan

Dylan Bushell-Embling  |   March 22, 2012
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Vodafone India's chairman has slammed the government for moving to retroactively change the nation's tax law to enable it to collect on a 113 billion rupee ($2.23 billion) tax demand.
But Vodafone India chairman Analjit Singh also firmly rejected speculation that Vodafone may exit India as a result.
Vodafone recently won a supreme court battle with India's income tax department.
The court ruled that Vodafone should not be required to pay tax on its $11.2 billion acquisition of Hutchison's stake in what is now Vodafone India in 2007, finding that the tax department had no jurisdiction because the transaction was between two Cayman Islands-based entities.
But the government is moving parliament to amend India's income tax law retrospectively from 1962, to also cover overseas transactions of domestic assets.
If the changes are made, the finance ministry has asserted that Vodafone will instantly have to pay the tax claim, PTI reported.
Singh told CNBC-TV18 that the change would be “grossly unfair to Vodafone and in general.”
He said Vodafone is the largest foreign direct investor in India, and has so far invested nearly $26 billion in the nation, and that a retrospective amendment of tax law will not augur well for FDI."
But Singh added that there is no question of Vodafone pulling out of India, reaffirming the company's commitment to the market.
Dylan Bushell-Embling


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