New Delhi: The I-T department issued Vodafone a reminder over its Rs 14,200-crore tax demand and threatened to seize assets in the case of non-payment, a move the UK firm said shows disconnect with Prime Minister Narendra Modi’s promise of a tax-friendly environment.
The department February 4 sent a notice to Vodafone seeking Rs 14,200 crore in taxes, which it says are due from its USD 11 billion acquisition of Hutchison Whampoa’s India telecom business in 2007. The matter is under international arbitration.
“We can confirm that we have received a tax reminder from the Tax Department that also references asset seizures in the event of non-payment,” a Vodafone spokesperson said. The tax demand relates to a dispute that is currently the subject of international arbitration, he said. Vodafone has disputed the tax demand over its acquisition of 67 per cent stake in Hutchison, now called Vodafone India, arguing that no tax was due as the transaction was conducted offshore.
But the tax department’s contention is capital gains were made on assets in India. “The government stated in 2014 that existing tax disputes, including ours, would be resolved through the existing judicial process,” Vodafone said in the statement.
The company also made a reference to the promise made by Modi at Make-in-India event in Mumbai Saturday. “In a week when Prime Minister Modi is promoting a tax-friendly environment for foreign investors – this seems a complete disconnect between the government and the tax department,” Vodafone said. PTI
