Revenue department sends Vodafone tax reminder
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The revenue department has sent a reminder notice to British telecom major Vodafone to pay taxes, estimated at around Rs 11,200 crore, for its acqusition of Hutchison's stake in 2007.
"Vodafone confirms that it has received a reminder from the Indian tax authorities that the original tax demand remains due from the Hutchison Whampoa/Vodafone transaction in 2007," the telecom firm said in a statement.
The company futher said that it has replied to the revenue department saying that no tax is payable.
"Vodafone has replied to this reminder, stating that it continues to believe that no tax is payable on the above transaction," the British firm said.
The tax reminder, the company added, does not include any deadline for payment of the tax.
The reminder relates to capital gains tax arising from the sale of telecom business by Hong Kong-based Hutchison Whampoa that involved Indian assets.
The Income Tax department on October 22, 2010 passed an order determining a tax liability (including interest) of Rs 11,218 crore on Vodafone for the deal which took place in the Cayman Islands in 2007. The Supreme Court, however, quashed the order in January last year.
After the apex court's ruling, the Income Tax Act was amended with retrospective effect to bring into the tax net such overseas merger and acquisition deals that involve Indian assets.
The Finance Act, 2012, seeks to validate the order of the Income Tax Department. The department had also passed an order imposing a penalty of Rs 7,900 crore on Vodafone in April, 2011.
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