Tuesday, September 02, 2014

Vodafone Wins India Tax Case, Shares Rise

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 $2.2 billion tax bill in a long-running dispute anxiously watched by foreign investors in India.  

Manan Vatsyayana | AFP | Getty Images

Vodafone

VOD.L

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[VOD.L  Loading...      ()   ], challenging the tax bill over its $11 billion deal to buy Hutchison Whampoa's
0013.HK

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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 ($496 million) with 4 percent interest to Vodafone, a lawyer for the British telecom company told reporters. 

Vodafone shares in London rose 1.4 percent after the verdict. 

The world's largest mobile operator by revenue had said it believes Indian 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.  

News.Yahoo.com

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