British business secy discusses Vodafone issue with Sharma

With British telecom major Vodafone being entangled in a tax dispute, Britain Wednesday asked India to provide a stable taxation regime and said it is looking for a "good" outcome.

New Delhi: With British telecom major Vodafone being entangled in a tax dispute, Britain Wednesday asked India to provide a stable taxation regime and said it is looking for a "good" outcome.
     
Emerging from a meeting with Commerce Minister Anand Sharma, UK Business secretary Vince Cable, when asked about his views on Vodafone issue, said, "We have talked about it but it is a matter for the courts in the first instance”.
     
"I think, simply to acknowledge Vodafone is an important company in India, that joint venture is one of the most rapidly growing and like other foreign investors, they need to have stability in the tax regime. We discussed this in a very amicable way. I think we look forward to a good outcome."
     
Vodafone is contesting over Rs 11,200-crore tax claim by the income tax department. The case relates to Vodafone's purchase of 67 percent of Hong Kong-based Hutchison's stake in Hutchison Essar for USD 11.2-billion through a Cayman Islands entity in 2007.
     
The transaction took place between Vodafone International Holdings BV of Netherlands and Hutchison Telecommunications International Limited.
     
Indian taxmen contended that Vodafone owed taxes from the purchase and the matter is now before the Supreme Court.
     
Vodafone has consistently maintained that it does not need to pay any tax as the transaction took place between two overseas companies and the Indian tax department has no jurisdiction over the transaction.
     
The income tax department, however, contends that that Vodafone owes the Indian Government taxes to the tune of over Rs 11,200-crore.
     
In November last year, the Supreme Court had directed Vodafone, to deposit Rs 2,500 crore, along with a bank guarantee of Rs 8,500 crore, before for adjudication of the suit.

PTI

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