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Vodafone Gets India Tax Office Reminder on $2 Billion Tax Dues

Sunday, 6 Jan 2013 | 10:13 PM ET
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British telecommunications carrier Vodafone Group said on Saturday it has received a reminder from Indian tax authorities on disputed tax dues over its 2007 acquisition of Indian mobile assets.

Vodafone, the world's biggest mobile operator by revenue, said in a statement the reminder does not include a deadline for payment. "Vodafone has replied to this reminder, stating that it continues to believe that no tax is payable on the above transaction," the statement said.

Britain-based Vodafone, the largest overseas corporate investor in India, has repeatedly clashed with Indian authorities over a string of tax and regulatory issues since it bought into the country in 2007.

A year ago, India's Supreme Court ruled in favor of Vodafone in a 5-year, $2 billion battle with Indian tax authorities arising from its acquisition of Hutchison Whampoa's Indian mobile business.

(Read More: Why India's Most Promising Sectors Fail to Deliver)

The Indian government later amended 50-year-old tax laws enabling it to make retroactive tax claims on long-concluded corporate deals. Prime Minister Manmohan Singh set up a panel to review the changes after global business groups criticized the move. The panel has recommended that the law to tax deals retrospectively should be scrapped, but the government is yet to make a final decision.

Earlier on Saturday, the Economic Times reported that tax authorities had asked Vodafone to pay 140 billion rupees ($2.5 billion), including interest on the tax dues.

Last April, Vodafone threatened the Indian government with arbitration proceedings in its fight over the retrospective tax proposal.

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