Monday, December 23

Vodafone will be challenging Rs 3,700 crores tax demand

Vodafone Group Plc will challenge the Income Tax Department’s notice seeking Rs 3,700 crore relating to its call centre business.

The department has sent the notice, which is the final assessment order, to its Indian arm.

“Vodafone maintains that there is no tax payable on this transaction and the company will file an appeal before the tax appeal tribunal as soon as possible,” a company spokesperson said in an e-mail reply toBusiness Line.

Defended strongly
“The facts of this case – including the transaction structure – were examined in considerable detail by Supreme Court, which delivered an unambiguous judgment affirming that there is indeed no tax due. Vodafone will continue to strongly defend its position against this order,” the British telecom major said in the mail.


Vodafone disagrees with the dispute resolution panel’s decision relating to the transfer pricing order, which it received in December 2011, it added.

The case relates to the transfer pricing order in connection with sale of call centre business to Hutchison Whampoa Properties India Ltd and the “assignment of call options” to Vodafone International Holdings BV.

In its December 2011 order, the Tax Department had asked Vodafone to add Rs 8,500 crore to its taxable income, thus raising the tax liability of the company.

Now, the IT Department has issued a final assessment order and a notice of demand, providing the company with 30 days to comply or approach an appropriate forum for relief.

Another tax liability

The telecom major is also facing a Rs 11,200-crore tax liability (plus interest) on its 2007 acquisition of Hutchison Whampoa’s stake in India’s telecom major, Hutchison Essar.

Source : The Hindu Business Line

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