Vodafone says India Supreme Court to hear tax appeal
British mobile giant Vodafone said Monday that the Supreme Court will hear its appeal next month against a ruling that it must pay a hefty tax bill on its purchase of an Indian phone group.
The company's challenge to the Supreme Court came after the Bombay High Court upheld an order that it must pay taxes on its 11.1-billion-dollar acquisition of a majority stake in Hutchison Essar in 2007.
"We are pleased that the Supreme Court has decided to hear Vodafone's appeal against the recent Bombay High Court verdict on the issue of jurisdiction," a spokesman said in an emailed statement after a hearing on Monday.
At the same time, the company said Indian tax authorities have been ordered to determine the potential tax liability to present to the court at the hearing slated for October 25.
The spokesman reiterated that the company "firmly believes that this transaction is not subject to tax in India."
Vodafone has not disclosed the size of the potential tax bill, but domestic media reports have put it as high as 120 billion rupees (2.6 billion dollars).
The lower court held that India's tax department could claim taxes from cross-border acquisitions and mergers.
The case has been closely followed as experts say it could have repercussions for other purchases of Indian assets by foreign companies.
© 2010 AFP