The Bombay High Court has deferred the hearing of Vodafone’s appeal in its Indian tax bill case until 8 February 2011, according to media reports.
In mid-October, the British mobile operator filed a petition with the court against a step taken by the…
The Bombay High Court has deferred the hearing of Vodafone’s appeal in its Indian tax bill case until 8 February 2011, according to media reports.
In mid-October, the British mobile operator filed a petition with the court against a step taken by the Indian tax authorities to treat the company as an ‘agent’ of the seller in its purchase of Hutchison Telecom in 2007.
A few months before that, the court had ruled that authorities were allowed to seek a tax bill from Vodafone International, a Dutch subsidiary of Vodafone, on the US$11.2bn Essar acquisition.
“Having pursued one line of argument in seeking tax from Vodafone through alleging failure to withhold tax; the Tax Office has now initiated a different process – treating Vodafone as an ‘agent’ of the seller,” Vodafone wrote in a statement, in October, to TelecomFinance.
“Vodafone contends that the key issue of jurisdiction (as to whether the Indian tax office can tax the transfer of a foreign company’s shares between two non-residents) is currently under appeal to the Supreme Court of India. Hence any action which seeks to treat Vodafone as an ‘agent’ of Hutchison is misguided and premature,” read the statement.
The Supreme Court of India has set the final appeal hearing on the whole case for 24 February. Some experts in the industry fear that if the Supreme Court decides to go ahead with the US$2.5bn tax bill, other foreign firms might be deterred from investing in the country.
