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Indian Supreme Court Adjourns Vodafone Case

by Mary Swire, Tax-News.com, Hong Kong

26 October 2010


The Indian Supreme Court has adjourned a hearing of the tax case against Vodafone to November 15 after the UK headquartered telecoms group asked for more time to consider the INR112bn (USD2.5bn) tax notice sent by the Income Tax department. The demand includes tax and interest for 42 months.

Vodafone International Holdings BV had 30 days to comply with the tax notice, according to a statement from the Central Board of Direct Taxes. Vodafone was held liable for capital gains tax which, the tax department claimed, should have been paid when it bought Hutchison Whampoa’s Indian mobile phone network in 2007 in a series of offshore company purchases.

Commentators have suggested that the high court's view of Vodafone's tax liability expressed on September 8, was that, as buyer, it would only be liable to the extent of income attributable to assets in India, whereas the tax department had based its demand on the whole value of the deal, without any apportionment.

Vodafone continues to believe that it has no liability in India whatsoever.

TAGS: court | capital gains tax (CGT) | tax | India | interest | offshore | telecoms

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