Vodafone cries foul as India slaps tax reminder
Global telecom giant Vodafone has taken exception to the Indian tax department threatening to seize its assets if it fails to pay a disputed demand of over Rs 14,000 crore, which is still under international arbitration.
New Delhi: Global telecom giant Vodafone has taken exception to the Indian tax department threatening to seize its assets if it fails to pay a disputed demand of over Rs 14,000 crore, which is still under international arbitration.
"We can confirm that we have received a tax reminder from the Tax Department that also references asset seizures in the event of non-payment," the company said in a statement here on Tuesday, alluding to the capital gains tax slapped on it for the acquisition of Indian assets.
"This dispute is currently the subject of international arbitration. The Indian government stated in 2014 that existing tax disputes, including ours, would be resolved through existing judicial process," the company added.
The strongly-worded statement also said the policies pursued by the tax department were in variance to what Prime Minister Narendra Modi as also Finance Minister Arun Jaitley have been saying: That India will not pursue retrospective taxation.
"In a week when Prime Minister Modi is promoting a tax-friendly environment for foreign investors, this seems a complete disconnect between the government and the Tax Department," Vodafone said.
The dispute in this case relates to Vodafone`s $11 billion acquisition of a 67 percent share in the mobile phone business of Hutchison Whampoa. Vodafone maintains it is not liable to pay to India`s tax department since the transaction was conducted offshore, while authorities here have said the deal involved company assets in this country.
Vodafone has been involved for years in three disputes with the Indian tax authorities.