Vodafone India has held a number of meetings with the Indian government this week, in order to negotiate a long-running tax dispute.
The Indian arm of the telco group has previously refuted the government’s demands for over US$2bn in tax, but this…
Vodafone India has held a number of meetings with the Indian government this week, in order to negotiate a long-running tax dispute.
The Indian arm of the telco group has previously refuted the government’s demands for over US$2bn in tax, but this week’s discussions are hoped to result in an agreement, according to media reports.
As TelecomFinance reported in November, the Indian arm of the telco group was awarded spectrum licences in India’s recent 2G auction, costing the telco INR11.28bn (US$219m).
However, India’s amended tax laws demand retrospective tax for cross-border transactions. Due to Vodafone’s acquisition of a 67% stake in Hutchison Essar back in 2007, the Indian authorities want the telco to pay capital gains tax made under the previous owners.
Earlier this month, India’s tax department issued another reminder notice to Vodafone, alongside a demand for interest payments and a penalty charge, according to media reports.
Vodafone has not made an announcement regarding this week’s discussions, but issued a statement earlier this month saying it “continued to believe that no tax is payable,” said the reports.
India plans to hold another 2G auction in March, following a lacklustre response to November’s auction where the government raised less than a quarter of its sales target. Some critics argue that India’s telecoms industry is still struggling to attract interest after the scandal-ridden 2G auction of 2008 when licences were said to be illegally granted.
