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Vodafone involved in yet another Indian dispute

Vodafone has become embroiled in yet another Indian tax dispute after being forced to pay $821 million "under protest".

The telecommunications company paid Rs3,900 crore relating to its purchase of a 33% stake in its Indian mobile phone joint venture Vodafone-Essar. The deal was worth $5.4 billion.

The Mumbai tax authorities confirmed that the payment had been made under protest meaning that Vodafone will contest the tax demand. This means that the company will be spared the interest liability if it loses the case.

In the dispute, Essar and Vodafone both argue that they do not have to pay any Indian tax on the transaction.

This case differs to the issue being disputed at the Supreme Court because Vodafone did not deduct tax and claim exemption on the grounds that this is an international transaction.

More to follow...

For full coverage of Vodafone’s Supreme Court hearing, follow www.internationaltaxreview.com

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