HC to decide on Vodafone tax case on Dec 17

The Bombay High Court will dispose off the Vodafone income tax issue on December 17.

British telecom major Vodafone had passed the buck on payment of tax of over $2 billion to Hutchison Telecommunications International (HTIL), the former joint venture partner of the Essar group in Hutch-Essar, stating that taxes are to be paid by the seller. Vodafone had recently bought the 67% stake held by Hutchison in Hutch-Essar.

The income tax (I-T) department had issued a show-cause notice to Vodafone-Essar asking why capital gains tax on the $11.1 billion deal should not be levied on the company.

Vodafone-Essar, on its part, has filed a writ petition in the Bombay High Court challenging the right of the authorities to levy a capital gains tax.

According to Vodafone Group chief executive officer Arun Sarin, "Neither the Essar company, nor the Vodafone company, nor Vodafone-Essar (joint venture company) are party to it. Usually, taxes are paid by the seller, and the seller is not any of the parties represented here."