Member access

4-Traders Homepage  >  Shares  >  London Stock Exchange  >  Vodafone Group plc    VOD   GB00B16GWD56

VODAFONE GROUP PLC (VOD)

95
SummaryNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll news 

Vodafone Group plc : India May Hit Vodafone With $3.75 Billion Tax Bill After Law Change

05/09/2012 | 04:36am US/Eastern

India plans to demand about $3.75 billion in taxes from the Vodafone Group PLC (VOD.LN) if parliament approves a law to retroactively tax overseas mergers which have an underlying Indian asset, a senior official said Wednesday.

The demand will include basic tax of about $1.48 billion, a penalty of a similar amount and interest charges of about $790 million, Mr. R.S. Gujral, secretary at the Department of Revenue in the Ministry of Finance, said on television.

The amount mentioned by Gujral has been talked about for a while now, but this is the first time a senior government official has gone on record to confirm.

The amount is nearly double the $2 billion tax that the government is believed to have demanded earlier.

The case involves Vodafone's $11.2 billion purchase of a majority stake in Hutchison Whampoa Ltd.'s Indian assets in 2007. The British company acted through a Dutch subsidiary while Hutchison Whampoa did the deal using a Cayman Islands unit.

Vodafone says it isn't liable to pay any tax as the deal was conducted overseas, but the government says this argument is flawed as it involves the transfer of assets based in India.

The Supreme Court in January agreed with Vodafone's case.

The tax law change, introduced as part of the Finance Bill in March, is seen by industry experts as sidestepping the Supreme Court ruling.

The bill, which was passed by the lower house of parliament Tuesday, is now awaiting approval by the upper house.

If it is passed and gets presidential approval, it will allow India to tax transactions dating back to 1962.

"Once the Finance Bill is passed, the interest amount [in the Vodafone case] will be updated and then taken forward," Gujral said.

A Vodafone spokesman wasn't immediately available for comment.

--By Mumbai Bureau, Dow Jones Newswires; 91 22 6145 6100; djn.in@dowjones.com

React to this article
Latest news on VODAFONE GROUP PLC
4h ago VODAFONE : AG says accept Vodafone HC ruling
6h agoDJIndia Unlikely to Appeal Vodafone and Shell Tax Cases
1d ago VODAFONE : Phone operators confirm improvements to coverage
1d ago VODAFONE : Set To Fully Acquire Greek Broadband Provider Hellas
1d ago VODAFONE QATAR : to buy QNBN
1d agoDJLONDON MARKETS : Thomas Cook Shares Slammed In London; GDP Growth Rate Confirmed
1d ago VODAFONE : Unveils initiative for small, medium firms
1d ago India advised against challenging Vodafone tax ruling - source
1d ago VODAFONE : Broadband bills may rise for 20,000
1d agoDJLONDON MARKETS : Thomas Cook Shares Slammed In London; GDP Growth Rate Confirmed
Advertisement
Dynamic quotes  
ON
| OFF