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India’s Tax Dept Asks Vodafone to pay $2.1Bn Tax Or Face Asset Seizure


India’s Tax Dept Asks Vodafone to pay $2.1Bn Tax Or Face Asset Seizure

India’s tax department has issued a notice to Vodafone, asking the company to pay the bill of $2.1 billion (INR 142 billion). The failure of payment will lead to the seizure of Vodafone Group Plc’s assets in the country, reports Bloomberg Business.


Vodafone incurred the tax amount in 2007 during its purchase of the mobile phone business of Hutchison. The telecom giant purchased a 67% stake in the business owned by Hutchison from Li Ka Shing Holdings through a subsidiary based in the Netherlands. The $11.2 billion transaction was routed through the Cayman Islands, and Vodafone said it did not owe the Indian government any taxes for the deal since it was conducted offshore.

However, the Indian government said it owed taxes from the transaction since it involved the sale of assets within India. In the arbitration in Supreme Court during 2012, Vodafone walked free. Subsequently, the Government amended country’s tax laws to apply to transactions like the Vodafone-Hutchison deal. Vodafone has disputed the tax bill it was presented after the law was changed and began international arbitration proceedings against it in 2014.

The matter is still undergoing international arbitration proceedings.


Ria Lakshman. V is a lead news writer at The Telecom Times. She studied Journalism at Manipal School of Communication and proceeded to work in newspapers and magazines, with technology as her focus area. Passionate about Telecommunications sector, her move to 'The Telecom Times' was a natural choice. Alongside, she also writes for Telecom Talk, where she covers news and tech commentaries in the sector of telecom. In the free time, Ria loves to go camping, read books, or sketch illustrations. She also runs a local design studio and promotes eco-friendly crafts. Ria can be found sharing her knowledge and insights on Twitter.



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