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Monday, September 27, 2010

Telecom tax bills: Vodafone Essar losing in India, European Telecom winning in the UK

India's Supreme Court has set 25th October as the next hearing for Vodafone's tax appeal. Vodafone could owe the Indian government more than 120 billion rupees (around £1.7 billion) following a court ruling earlier this month, although the company insists nothing is due. The case centres on Vodafone's 2007 purchase of Hutchison's Indian business, which saw Netherlands-based Vodafone International acquiring a stake in Hong Kong-based Hutchison; the stake was owned by a company in the Cayman Islands. Mumbai's High Court says Capital Gains Tax is payable and should have been collected by Vodafone.

Here in the UK, handset distributor European Telecom – which went into administration in 2007 – has won a case against HM Revenue and Customs involving £8.8 million in withheld VAT repayments. HMRC, which had disallowed the VAT because it was investigating a suspected VAT carousel fraud, has been ordered to repay around £13 million in VAT and costs. HMRC has an option to appeal against the decision.

Sources: Bloomberg.com; HindustanTimes.com; MobileNewsCWP.co.uk]

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Author: The Fonecast
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