Vodafone to take steps to safeguard interest

By : |May 10, 2012 0

NEW DELHI, INDIA: A day after Finance Minister Pranab Mukherjee declared that India won’t give in to pressure and change its retrospective tax legislation, Vodafone Plc said it is disappointed and will take all possible steps to safeguard shareholders interest.

[image_library_tag 671/19671, align=”left” title=”Vodafone” border=”0″ hspace=”7″ alt=”Vodafone” vspace=”7″ width=”150″ height=”100″ ,default]"We are naturally disappointed that despite very widespread concern in India and internationally, the government has not seen fit to propose amendments to address the uncertainty caused by retrospective tax legislation," the Britain-based company said in a statement on Wednesday.

"We are studying the legislation as amended and will take all possible steps to safeguard our shareholders’ interests," it added.

The Lok Sabha on Tuesday passed the finance bill with the proposal that would amend the law to impose capital gains tax on merger and acquisitions that involve foreign companies having assets or shares in the country.

The company now faces an imminent tax demand notice of up to Rs. 20,000 crore.

Vodafone said it has put in Rs. 50,000 crore in the Indian operations and has been one of the largest taxpayers in the country with over Rs. 29,000 crore paid to the exchequer.

And despite making considerable investments over the last five years, the company claimed, it is "yet to take a single rupee out of the country".

"It would be grossly unjust if, on the basis of legislation passed five years after the event, Vodafone were to be charged tax on a gain made by someone else, especially where the Indian Supreme Court unambiguously ruled that no tax was payable in India according to the laws of India in force in 2007."

The case involved a levy on a 2007 transaction in which Vodafone Plc had paid $11.2 billion to Hong Kong-based Hutchison for acquiring a 67-percent stake in Indian telecom services major Hutch Essar.

The Supreme Court in January ruled in favour of Vodafone saying Indian tax officials did not have jurisdiction over a deal between two global companies even if assets involved in that deal were located in India.

Vodafone, however, said it continued to be a very committed investor in India.

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