SC directs Vodafone to pay $550m

Nov 15, 2010 |

Reuters

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New Delhi, Nov. 15: The Supreme Court on Monday directed Vodafone to deposit $550 million within three weeks in relation to a $2.5 billion tax dispute, even as the company looks for an out-of-court settlement.

Vodafone has also been directed to make a bank guarantee worth $1.9 billion within eight weeks, a Vodafone spokesman said on Monday.

The firm, fighting 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’s order that Indian tax authorities had jurisdiction over tax bills in cross-border deals. The tax office had asked Vodafone to pay the amount within 30 days, but the British firm had said it “strongly disagrees” with the calculation.

“Vodafone is confident that there is no tax liability resulting from this transaction, and all the tax and legal advice it has received remains consistent with this view,” the company said in a statement on Monday.

The Supreme Court said that the authorities could withdraw the deposit money on the condition that they would return it with interest if Vodafone won the case.

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