income tax india
NEW DELHI (Dow Jones)--India is likely to send a notice to a Vodafone Group PLC (VOD.LN) unit asking it to explain why it shouldn't pay up to $1.8 billion-$1.9 billion in taxes, an official at the country's tax department said Tuesday.
The notice, which will likely be sent within a month, will also ask Netherlands-registered Vodafone International Holdings BV to explain why it didn't comply with the country's tax norms while buying a stake in Hutchison Essar, Prakash Chandra, the director general for international taxes, said.
"We are drafting the showcause notice. We hope to complete that process very soon," Chandra told Dow Jones Newswires.
The move comes nearly seven months after the country's Supreme Country declined to hear an appeal by Vodafone International, which was contesting the right of India's authorities to impose tax on a deal completed overseas.
In February 2007, Vodafone paid $11 billion for a 67% stake in Hutchison Essar from CPG Ltd., which is owned by Hutchison Telecommunications International Ltd. (HTX) and registered in the Cayman Islands in a multi-layered transaction.
Vodafone says the deal isn't liable to be taxed in India as it took place on foreign soil.
But India's income tax department argues that Vodafone is liable to pay taxes because the transaction involved the transfer of an Indian asset.
It also says that Vodafone should have withheld tax on behalf of the government.
"The notice will say the transaction attracts capital gains tax in India. You (Vodafone) have not deducted the taxes while making the payment, so why you should not be asked to pay the taxes," Chandra said.
NEW DELHI (Dow Jones)--India is likely to send a notice to a Vodafone Group PLC (VOD.LN) unit asking it to explain why it shouldn't pay up to $1.8 billion-$1.9 billion in taxes, an official at the country's tax department said Tuesday.
The notice, which will likely be sent within a month, will also ask Netherlands-registered Vodafone International Holdings BV to explain why it didn't comply with the country's tax norms while buying a stake in Hutchison Essar, Prakash Chandra, the director general for international taxes, said.
"We are drafting the showcause notice. We hope to complete that process very soon," Chandra told Dow Jones Newswires.
The move comes nearly seven months after the country's Supreme Country declined to hear an appeal by Vodafone International, which was contesting the right of India's authorities to impose tax on a deal completed overseas.
In February 2007, Vodafone paid $11 billion for a 67% stake in Hutchison Essar from CPG Ltd., which is owned by Hutchison Telecommunications International Ltd. (HTX) and registered in the Cayman Islands in a multi-layered transaction.
Vodafone says the deal isn't liable to be taxed in India as it took place on foreign soil.
But India's income tax department argues that Vodafone is liable to pay taxes because the transaction involved the transfer of an Indian asset.
It also says that Vodafone should have withheld tax on behalf of the government.
"The notice will say the transaction attracts capital gains tax in India. You (Vodafone) have not deducted the taxes while making the payment, so why you should not be asked to pay the taxes," Chandra said.
No comments:
Post a Comment