Vodafone faces $2b tax demand in India

India's The Income Tax department has slapped a notice on UK-based mobile firm Vodafone for non-payment of about $2 billion in tax after it acquired a majority stake in Hutchison-Essar earlier this year, a report from local paper The Statesman said.

The Statesman report, quoting industry sources, said the department has sent a notice to Vodafone for not paying capital gains tax, arguing that the company should have deducted tax at source while making payment to Hong Kong-based Hutchison Telecom International.

Vodafone is studying the notice and seeking a legal opinion, according to the source. It may also make a statement in a day or two.