Indian IT department asks Supreme Court to review Vodafone tax case (India, UK)
The Indian Income Tax department has asked the Supreme Court to review its decision in the Vodafone tax case. The Supreme Court had favoured the British telecom giant in its ruling, claiming that Vodafone was not required to pay taxes amounting to US$ 218 billion for the acquisition of Hutchison Whampoa Ltd’s Indian wireless business in 2007.
Chief Justice S.H. Kapadia, who gave the judgment, claimed that the government has no jurisdiction over Vodafone’s purchase of mobile assets in India, as the transaction took place in Cayman Islands between HTIL & Vodafone. Further, the apex body had also ordered the income tax department to return the US$ 495 million amount submitted by Vodafone during the trial, along with a 4 percent interest.
Justice Kapadia had claimed that shareholding in companies incorporated outside India is property located outside India. Where such shares become subject matter of offshore transfer between two non-residents, there is no liability for capital gains tax.
As per sources, the department’s appeal for a review is their final attempt to save face, and has not been received well by the industry. The decision by the Supreme Court was considered to be a landmark judgement in the Indian telecom industry, with many operators believing that this could encourage foreign investment in the nation.
Sources claim that the review plea may be considered by the court on 27 February 2012.
Vodafone wins legal case against Indian tax authorities (India, UK)
Vodafone has emerged victorious in a long lasting legal battle against the Indian income tax authorities, as the nation’s Supreme Court ruled in favour of the British giant. According to reports, Chief Justice S.H. Kapadia has said that the government has no jurisdiction over Vodafone’s purchase of mobile assets in India as the transaction took place in Cayman Islands between foreign entities.
The legal battle began almost five years ago with Vodafone’s acquisition of Hutchison Whampoa Ltd’s Indian wireless business in 2007. The Indian income tax authorities had filed a legal claim stating that Vodafone owed taxes amounting to US$ 2.2 billion for the acquisition. However, the apex body has overruled the claim and has ordered the income tax department to return the US$ 495 million amount submitted by Vodafone during the trial, along with a 4 percent interest, within the next two months.
As per reports, the Supreme Court also said that during 2002-11, the Indian arm of Vodafone contributed US$ 4.01 billion towards direct and indirect taxes to India. Further, the offshore transaction was bonafide; hence it was non-taxable.
The judgment has been well received by members of the telecom industry who believe that the government’s positive response towards foreign investment could encourage more investors to enter the nation.
Vodafone still considers no tax to pay (India)
Vodafone has stated that it continues to believe that it had no tax liability over its 2007 purchase of Hutchison Whampoa Ltd’s mobile business in India.
Vodafone, which has been fighting a $2.5 billion tax bill in India over the deal, stated its position had not changed with regard to the tax case.
According to the company, every adviser they have consulted, both during the transaction and since, is in unanimous agreement that no tax liability should arise.
India’s Supreme Court will hear the tax case on July 19 and Vodafone has stated thet it would continue to defend its position vigorously.
Nordic telecom operators to cater iPad customers
Several Nordic telecom operators will offer customers data subscription packages exclusively for Apple Inc’s iPad. Apple has not yet said anything on when it will release the iPad in these countries, but the recent news from the telecom operators suggests the product launch is forthcoming.
Hutchison Whampoa Ltd’s European operator 3, TeliaSonera AB, Tele2 AB and Telenor ASA all claimed that they will offer data subscription packages exclusively for the iPad, giving iPad users internet connectivity through their respective networks. The telecom operators did not say when they plan to launch the subscription packages and did not disclose any price details.
According to Bengt Olsson, head of communications at TeliaSonera, the company will not sell the iPad. As things look right now, the company will only offer subscription packages for the iPad. The iPad launch is looming and the company plans to release their subscription offer in Sweden, Norway, Finland and Demark simultaneously.
India’s top court postpones Vodafone hearing to Nov 15
According to the lawyer for the telecom firm Harish Salve, India’s apex court has deferred the hearing of Vodafone’s $2.5 billion tax case to Nov. 15.
The decision by the Supreme Court to hear Vodafone Essar’s appeal next month came after the telco sought time to review a recent order from the Income Tax office.
Vodafone is in pursuit of a legal action on a tax bill in India over its 2007 purchase of Hutchison Whampoa Ltd’s mobile business in the country, had appealed to the Supreme Court challenging a lower court order that Indian tax authorities had jurisdiction over tax bills in cross-border deals.
Last week, the tax office asked Vodafone to pay US$2.53 billion within 30 days, but the British firm strongly disagrees with the calculation.
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