India seeks to cancel Vodafone tax talks - memo

NEW DELHI Tue Feb 11, 2014 10:18pm IST

A man checks his mobile phone as he walks past a shop displaying the Vodafone logo on its shutter in Mumbai January 15, 2014. REUTERS/Danish Siddiqui/Files

A man checks his mobile phone as he walks past a shop displaying the Vodafone logo on its shutter in Mumbai January 15, 2014.

Credit: Reuters/Danish Siddiqui/Files

Related Topics

Stocks

   

NEW DELHI (Reuters) - India plans to withdraw from talks with Vodafone Group Plc to resolve a nearly $2 billion tax dispute after the British operator pushed for the inclusion of a separate tax case in the talks, according to an internal government note seen by Reuters.

The finance ministry plans to seek the cabinet's approval to withdraw the conciliation proceedings, the note said. Vodafone (VOD.L) wanted a transfer pricing dispute involving one of its units to be made part of the talks, it said.

Withdrawal of the conciliation proceedings could mean the tax office raising a fresh demand on Vodafone.

"The matter related to Vodafone will be taken to the cabinet, and the cabinet will take a final decision," D.S. Malik, a finance ministry spokesman, told Reuters, declining to share specifics of the proposal.

A Vodafone spokesman in London declined to comment.

The world's second-largest mobile operator, which entered India in 2007 by acquiring Hutchison Whampoa's mobile phone assets, has been contesting a tax bill of about 112 billion rupees over the acquisition.

The Supreme Court ruled in 2012 that Vodafone was not liable to pay any tax over the transaction, but the government changed rules that allowed it to make retroactive tax claims on already-concluded deals, drawing criticism from business groups.

The cabinet in June last year approved a proposal to start conciliation talks with Vodafone over the tax dispute. While formal talks are yet to begin, Vodafone and the government officials had a series of meetings last year.

Vodafone is separately contesting disputes arising out of the so-called transfer pricing deals involving its unit Vodafone India Services Private Ltd. Indian tax office had asked Vodafone to pay about $600 million in the dispute, before the demand was halted by a court.

(Reporting by Devidutta Tripathy and Rajesh Kumar Singh; Editing by Sumeet Chatterjee and Louise Heavens)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Canada Shooting

Canada Shooting

Canada's parliament attacked, soldier fatally shot nearby.  Full Article 

Earnings Season

Earnings Season

Wipro sees rosier end to year as U.S. clients spend.  Full Article 

Business Climate

Business Climate

Fears for tough penalties grow as India cleans up business  Full Article 

New Email Service

New Email Service

Google launches new email service dubbed "Inbox".  Full Article 

DLF Appeals

DLF Appeals

DLF seeks interim relief from capital market ban  Full Article 

Falling Oil Prices

Falling Oil Prices

Indian consumers respond to softer oil, food prices  Full Article 

Book Keeping

Book Keeping

RBI fires warning shots on companies' lack of FX hedging.  Full Article 

Policy Repo Rate

Policy Repo Rate

Most external members suggested rate cut in RBI's Sept review.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage