Vodafone India chairman blasts tax law scheme
Vodafone India's chairman has slammed the country’s government for moving to retroactively change the nation's tax law to enable it to collect on a 113 billion rupee (€1.6 billion) tax demand.
But Analjit Singh also firmly rejected speculation that Vodafone may exit India as a result.
Vodafone recently won a supreme court battle with India's income tax department. The court ruled Vodafone isn’t required to pay tax on its $11.2 billion (€8.5 billion) acquisition of Hutchison's stake in what is now Vodafone India in 2007, and that the tax department had no jurisdiction because the transaction was between two Cayman Islands-based entities.
However, the government is now calling on parliament to amend India's income tax law retrospectively from 1962, to also cover overseas transactions of domestic assets.
If the changes are made, the finance ministry has asserted that Vodafone will instantly have to pay the tax claim, the Economic Times reports, citing the Press Trust of India.
Singh told CNBC-TV18 the change would be “grossly unfair to Vodafone and in general.”
He said Vodafone is the largest foreign direct investor in India, having so far invested nearly $26 billion in the nation, and that a retrospective amendment of tax law will harm foreign direct investment.