BBC News - Vodafone given $2.5bn Indian tax bill deadline

22 October 2010 Last updated at 14:04

Share this page

• Facebook
• http://www.bbc.co.uk/news/business-11606192" title="Post this story to Twitter">Twitter
• Share
• Email
• Print

Vodafone given $2.5bn Indian tax bill deadline

Vodafone has expanded fast in India, in part by buying rivals' operations

The Indian tax authorities have given Vodafone 30 days to pay a 112bn rupee ($2.5bn, £1.6bn) tax bill, despite an ongoing court case.

The tax demand relates to the mobile phone company's 2007 purchase of the Indian telephone assets of Hong Kong conglomerate Hutchison Whampoa.

Vodafone has appealed the case to the Indian supreme court.

The firm says the $11bn transaction was exempt from tax because it took place between two offshore entities.

But the tax authorities now say that Vodafone must pay the capital gains tax, and have handed the company its first formal tax demand.

"Vodafone strongly disagrees with the tax calculation," the mobile operator said in a statement.

"The tax authority is attempting to interpret Indian law as it has never been interpreted for the past 50 years, and this interpretation also goes against internationally recognised tax norms."

via bbc.co.uk