Vodafone move SC over Rs 12,000-cr tax issue

Britain's Vodafone on Tuesday moved the Supreme Court challenging a Bombay High Court order that upheld the Income Tax Department's demand of Rs 12,000 crore (Rs 120 billion) tax on the company's over $11 billion deal with Hong Kong-based Hutchison in 2007.

"Vodafone remains convinced that there is no tax to pay on the Hutchison transaction and we will continue to defend this position vigorously," Vodafone Group Plc spokesperson said in a statement.

The Bombay High Court had last week dismissed Vodafone International's petition challenging the Indian tax authorities demand of Rs 12,000 crore (Rs 120 billion) in tax over the Hutchison deal.

The High Court division bench held that IT had the jurisdiction to tax the transaction. It, however, gave liberty to Vodafone to argue before the tax department that no penalty should be imposed as they genuinely believed they had no liability to deduct tax at source.

"Vodafone has filed an appeal with the Supreme Court in India today. The appeal challenges the recent High Court judgement on the issue of jurisdiction," the company statement said.

The Income Tax department has held Vodafone liable for not deducting tax at source from payment made to Hutchison and claimed around Rs 12,000 crore (Rs 120 billion) in tax and penalty in the 2007 deal.

"The transaction has sufficient nexus with India and the IT has the jurisdiction to levy tax on the transaction," Justice Dhananjay Chandrachud and Justice J P Deodhar had noted while delivering the verdict.