Court refers Vodafone share sale dispute to tax panel
MUMBAI (Reuters) - The Bombay High Court told Vodafone Group Plc (VOD.L) on Friday to submit its objections to a tax claim on the pricing of shares issued by a local subsidiary to another unit to the tax authorities' Dispute Resolution Panel.
The authorities have said Vodafone India Services Private Ltd under-priced shares issued more than four years ago to a Mauritius-based unit of Vodafone Group Plc by nearly 13 billion rupees and was liable to pay tax on the differential.
Vodafone, which said in February it had received the so-called transfer-pricing order from the tax office on the share transaction, had challenged it at the Bombay High Court saying share subscriptions did not fall within the scope of transfer pricing rules in India or internationally.
Transfer pricing is the value at which companies trade products, services or assets between units. Indian rules require all cross-border transactions between group companies to be valued at arm's length -- or at the same value as if the the transaction was with an un-related company.
The British mobile operator did not immediately comment after the court order on Friday.
The government has stepped up its tax demands against international companies to raise revenue as it struggles to cut its spending and avoid a credit rating downgrade.
In April the government said that 27 overseas and Indian companies underpaid taxes in the last fiscal year that ended in March, after they sold shares to their overseas units too cheaply.
Vodafone, the largest corporate investor in India, has repeatedly clashed with the Indian authorities over taxes since it bought Hutchison Whampoa's (0013.HK) mobile business in the country in 2007 and was held liable for the capital gains tax which the authorities say is owed on the deal.
The transfer pricing dispute is separate from the more than $2 billion tax demand on that deal. The Bombay High Court on Friday asked the tax authorities' Dispute Resolution Panel to give its verdict within two months.
(Reporting by Indulal PM; Writing by Devidutta Tripathy; Editing by Greg Mahlich)
- Tweet this
- Share this
- Digg this
- UPDATE 8-Divers struggle in search for South Korean ferry survivors
- India passes halfway mark in election with BJP gaining strength
- Acid attack survivor wins millions on 'Kaun Banega Crorepati'
- Runaway spy Snowden is surprise guest on Putin phone-in
- UPDATE 4-Nobel winner Garcia Marquez, master of magical realism, dies at 87
Wipro posted a 29 percent rise in its fourth-quarter net profit, beating expectations, helped by increased IT spending by its customers. For the quarter ended March 31, the company said it earned 22.27 billion rupees compared with 17.29 billion rupees a year earlier. Full Article | Full Coverage