Vodafone confident of no tax liability in Essar buyout

Monday, November 15, 2010

NEW DELHI - Telecom service provider Vodafone Monday said it is confident that there is no tax liability resulting from its acquisition of Hutchison Wampoa’s majority stake in Hutch Essar in India and it would wait till the Supreme Court hears the issue Feb 24, 2011.

“Vodafone is confident that there is no tax liability resulting from this transaction and all the tax and legal advice it has received remains consistent with this view,” said the company in a statement.

“After today’s hearing, Vodafone looks forward to the matter being heard in full on the 24th February, when the central issue of jurisdiction will be thoroughly reviewed by the Supreme Court,” it added.

Earlier, during the day the Supreme Court asked Vodafone to provide a deposit of Rs.2,500 crore ($550 million) as part of a tax liability in the takeover of Hutch Essar group’s India operations within three weeks, which will be returned in full, with interest, if the Supreme Court finds in Vodafones favour.

An apex court bench headed by Chief Justice S.H. Kapadia also said Vodafone has to provide a bank guarantee of Rs.8,500 crore to the government. The cash amount of Rs.2,500 crore has to be deposited in three weeks and the bank guarantee within eight weeks, it said.

Filed under: Economy

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