Vodafone given 30 days to pay £1.6bn Indian tax demand
Saturday 23 October 2010
British telecoms giant Vodafone was yesterday given just 30 days to pay a £1.6bn tax bill in India in an escalation of its row with authorities there.
The demand dates from 2007, when Vodafone paid $11bn for control of the Indian mobile phone business Hutchison Essar. The British firm believes the deal was structured to avoid Indian capital gains taxes, but Bombay's High Court has since ruled otherwise.
Vodafone is appealing against that decision and will take its case to the Supreme Court in Delhi on Monday. However, yesterday, it emerged that the Indian Tax Office is not waiting to hear the outcome of that hearing before beginning the process ofrecovering the back-taxes which it believes it is owed – and has given Vodafone just 30 days to pay up.
The demand is the first formal notice to Vodafone of how much it must pay should it lose the legal argument, and the 112.1bn rupee bill was at the top end of what analysts had feared.
However, the company has vowed to keep fighting the demand. "Vodafone strongly disagrees with the tax calculation," a spokesman for the company said. "The tax authority is attempting to interpret Indian law as it has never been interpreted for the past 50 years, and this interpretation also goes against internationally recognised tax norms."
This latest development will concern a number of international companies which have invested in India using deals structured similarly to Vodafone's takeover.
The row could also jeopardise Vodafone's relationships within the subcontinent. The company's chief executive, Vittorio Colao, is on record as having said that future investments in India might depend on the outcome of this case.
"I do believe in the country, but of course I now also need a positive outcome from the tax case and a stable regulatory environment to continue," Mr Colao told India's Economic Times this week.
- 2 California man brutally beat 82-year-old Sikh grandfather he mistook for 'one of those people'
- 4 Charles Kennedy 'had better judgement drunk than many sober politicians' says Ian Hislop
Amber Peat: Body found in search for missing 13-year-old who ran away after argument with her parents
California man brutally beat 82-year-old Sikh grandfather he mistook for 'one of those people'
Sepp Blatter resigns: FBI are investigating outgoing Fifa president, claims report
Alton Towers crash: Four guests seriously injured as Smiler ride carriages collide
Charles Kennedy dead: A guy once asked the Lib Dem leader who his favourite Muppet was and his letter response was wonderful
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination
Migrants in Kos: Photos show real tragedy after Brits abroad complain of 'awkward' holidays
British tourists complain that impoverished boat migrants are making holidays 'awkward' in Kos
Michael Gove determined to scrap the Human Rights Act – even if Scotland retains it
Threat to scrap Human Rights Act could see UK follow Nazi example, warns UN official
Church of England 'one generation away from extinction' after dramatic loss of followers
iJobs Money & Business
£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...
£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...
£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...
£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...