Vodafone faces $2 billion tax bill in India
The Mumbai High Court on Wednesday ruled to let the Indian government to continue an investigation into Vodafone Group PLC that could result in the company having to pay up to $2 billion in taxes, according to a media report
The online edition of the Financial Times reported that the court will allow India's income tax department to continue looking into Vodafone's $11 billion acquisition of wireless carrier Hutchison Essar, and to make its case that Vodafone is liable for billions in related Indian capital-gains taxes. The court scheduled an additional hearing on the matter for Dec. 11, according to the report.
Vodafone has argued that it is not liable for the taxes because the sale took place between offshore entities outside of the Indian government's jurisdiction. The company has also claimed that Hutchison, the seller, should be liable for any related taxes, the report said. According to the report, investors are "concerned that a ruling against Vodafone could mean any offshore deal by a foreign company with a substantial presence in India may be subject to Indian tax." India's tax department first brought their case against Vodafone in August, the report said
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