New Delhi Sep 30 (Calcutta Tube) Britain-based telecom major Vodafone Monday said the company did not make any capital gains in the Hutchison buyout deal and it will take action to defend its position in a matter related to a $2.6-billion capital gains tax claimed by Indian administration.
Earlier in the day, the Supreme Court declined to stay the Bombay High Court order that directed Vodafone to pay the tax liability towards its $11-billion acquisition of Hutchison Whampoa’s 67 percent stake in the telecom venture in India.
The court asked the income tax department to decide the liability within four weeks, not to impose levy any penalty and granted Vodafone the liberty to approach if it feels aggrieved by the assessment.
‘We firmly believe that this transaction is not subject to tax in India. Furthermore, as Vodafone is the acquiring company, we have clearly not made any capital gain on the sale,’ said the company in a statement released Monday.
‘We will continue to take whatever actions necessary to defend Vodafone’s position as the matter proceeds,’ it added.
The next hearing is scheduled Oct 25.
‘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,’ the company said.
The tax authorities contended that the Vodafone deal was liable to be taxed for capital gains, since the assets of the acquired company were based primarily in India.
The administration said it was incumbent on the buyer to withhold such levy and pay it to the exchequer.
The high court had earlier said the income tax authority’s order cannot be seen lacking the jurisdiction.