Vodafone again appeals €2b Indian tax claim

Vodafone has taken its €2 billion tax dispute with the Indian government to the Bombay High Court.
 
The global carrier is challenging the jurisdiction of the Indian income tax department to levy taxes on overseas transactions, the Economic Times said. After the tax office issued a fresh demand for capital gains tax relating to Vodafone’s 2007 acquisition of Hutchison Essar.
 
Vodafone filed its appeal on Monday, with the first hearing occurring earlier today, the Hindu Business Line said
 
The carrier maintains that it owes the Indian government nothing for the purchase of Hutchison’s stake in local carrier Essar – which is now named Vodafone Essar -, because the transaction was conducted outside India.
 
“Vodafone remains fully confident that no tax is payable and the legal advice we have received unanimously agrees,” a company spokesperson told Telegraph India.
 
India’s tax office issued a fresh demand for 120 billion rupees (€2.14 billion) it says Vodafone owes in capital gains tax last week.
 
It claims the tax still applies despite the transaction being conducted overseas, because key assets of Vodafone Essar are located in the country.
 
Vodafone’s arguments that the $11 billion (€9.21 billion) purchase of Hutchison Essar aren’t covered by Indian tax law have fallen on deaf ears during various court hearings to-date.
 
The carrier has lost earlier appeals to the Mumbai High Court and the Supreme Court, however the latter court did grant the option to appeal the tax office’s decision that has led to Vodafone’s latest action.

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