Vodafone takes $3b tax case to Indian high court

Dylan Bushell-Embling
09 Jun 2010
Daily News

Vodafone has taken its $2.6 billion tax dispute with the Indian government to the Bombay High Court.

The UK-based cellco is challenging the jurisdiction of the Indian tax office to levy taxes on overseas transactions, the Economic Timessaid, after the tax office issued a fresh demand for capital gains tax relating to Vodafone’s 2007 acquisition of Hutchison Essar.

Vodafone’s appeal to the Mumbai High Court has been adjourned until July 8, said the Telegraph India.

Vodafone maintains that it owes the Indian government nothing for the $11 billion purchase of Hutchison’s stake in local carrier Hutchison Essar – now named Vodafone - because the transaction was conducted outside India.

“Vodafone remains fully confident that no tax is payable and the legal advice we have received unanimously agrees,” a company spokesperson toldTelegraph India.

India’s tax office issued a fresh demand for 120 billion rupees ($2.6b) it says Vodafone owes in capital gains tax last week.

It claims the tax still applies despite the transaction being conducted overseas, because key assets of Vodafone Essar are located in the country.

Vodafone has lost earlier appeals in the Mumbai High Court and the Supreme Court, however the latter court did grant the option to appeal the tax office’s decision that has led to Vodafone’s latest action.

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