India issues Vodafone ultimatum
Indian tax authorities calculate that Vodafone owes just under 113 billion rupees (€1.8 billion) in back-taxes for its 2007 acquisition of Hutchison’s stake in Essar.
The income tax department issued a bill for 112.18 billion rupees Friday, ahead of the opening of Vodafone’s supreme court appeal against the tax bill today.
It gave the carrier just 30 days to stump up the cash, the Times of India reported.
India’s supreme court demanded that the sum owed be calculated ahead of the trial, and told Vodafone it would have to pay a deposit to stay a lower court ruling that the operator is liable for the tax.
Vodafone stated the tax calculation is wrong, maintaining its stance that the sale is not subject to Indian tax because it was conducted offshore, and that as the acquirer it made no income on the deal, the Times said.
The sum demanded came in at the high end of analyst’s predictions, according to the Financial Times.
Chief Vittorio Colao last week told the Economic Times the tax case will influence future investments in India, stating that he needs “a positive outcome,” from the trial to continue pumping cash into the country.