• 10 tips to find bargains

    Susan Erasmus gives advice on how bargain hunters can get the most bang for their buck.

  • Inside Labour

    Labour's bitter breaches need to be seen in historical context, says Terry Bell.

  • Rich getting richer

    Economists differ on how to tackle the chasm between rich and poor, says Leopold Scholtz.

Loading...
See More

Vodafone wins India tax case

Jan 20 2012 10:55 Reuters

Related Articles

Vodafone in UK tax probe

Vodafone, BP lifts FTSE

Vodafone surprises with bullish outlook

Egypt 'hijacks' Vodafone network

Vodacom loses SA head to Vodafone

Vodafone gets emerging markets boost

 
New Delhi - India’s tax office has no jurisdiction over Vodafone’s purchase of mobile assets in India, the Supreme Court ruled on Friday, in a big relief to the telecom giant that has been fighting a $2.2bn tax bill in a long-running dispute anxiously watched by foreign investors in India.

Vodafone, challenging the tax bill over its $11bn deal to buy Hutchison Whampoa’s Indian mobile business in 2007, had appealed to the Supreme Court after losing the case in the Bombay High Court in 2010.

The Supreme Court has asked the tax office to refund 25 billion rupees ($496m) with 4% interest to Vodafone, a lawyer for the British telecom company told reporters. Vodafone shares in London rose 1.4% after the verdict.

The world’s largest mobile operator by revenue had said it believes India's tax office has no right to tax the transaction between two foreign entities, and even if any tax is to be paid, it should be paid by the seller not the buyer.

Indian authorities had said the deal was liable for tax because most of the assets were based in India and because under local tax law, buyers have to withhold capital gains tax liabilities and pay them to the government.

Vodafone’s India unit is currently the country’s third-largest mobile carrier by subscribers and has the second-largest revenue market share.

Despite its rapid growth, India’s cellphone market has proved challenging for Vodafone, which has faced a host of problems since entering the fiercely competitive Indian arena.

In 2010, the British firm took an impairment charge of £2.3bn ($3.56bn) on its Indian operations due to severe competition and escalating spectrum costs.

Last year, it agreed to buy out its Indian partner Essar in a $5bn deal, putting an end to their highly fractious relationship that had spilled over into the open.  Vodafone has said it has plans to list the Indian operation although an IPO is not imminent.

NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

Brought to you by BizNews

More from BizNews

We're talking about:

SMALL BUSINESS

Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.
 
 

Business tips from the world’s billionaires

We share some of the world's most successful people's greatest tips and who knows, this might just lead you to your first million!

 
 

Luxury living

5 millionaires turned murderers
The youngest billionaires in the world and how they made it
Watch: Flying first class has never been this luxurious!
What to expect inside a royal nursery

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

How do you see your boss? He/sheis:

Previous results · Suggest a vote

Loading...