Vodafone wins Indian tax case

Gosh, isn\’t this interesting?

Vodafone has won a landmark tax dispute in India over its $11bn acquisition of a 67pc stake in Hutchison Whampoa\’s Indian mobile unit, which later became Vodafone Essar.

Another Private Eye/Ritchie nonsense ground into the dust.

The Indian Supreme Court ruled that the taxman had no jurisdiction over the British mobile operator\’s acquisition.

India\’s tax office said Vodafone was liable for $2.5bn (£1.3bn) in tax because most of the assets from the deal were based in India and under local tax law, buyers have to withhold capital gains tax liabilities and pay them to the government.

Vodafone has consistently protested against the tax bill on the grounds that the 2007 deal was between two overseas companies, that the tax was applied retrospectively, and capital gains tax is usually applied to the acquired company, not the buyer.

There was no tax evasion, there was no tax avoidance. This is the Supreme Court we\’re talking about, the arbiter of what actually is the law in that land.

This was entire and pure tax compliance, every rupee that Vodafone should have paid in tax Vodafone did pay in tax.

I look forward to this judgement being popularised by those who first raised it, don\’t you?

8 thoughts on “Vodafone wins Indian tax case”

  1. To be fair to Private Eye, Indian tax law is ridiculously chaotic.

    I think the story here is more about the dangers of absurd and extra-territorial tax law and interpretations. These stories are helpful reminders that expecting companies to genuflect before every stupid argument run by a tax authority (and I understand that a certain Private Eye correspondent was notorious for just such arguments) is neither sensible nor reasonable.

    The taxman is just another public authority and as liable to excess, irrationality and illegality as any other. Which is why a lot of the guff from Murphy and Private Eye is actually profoundly illiberal.

  2. This ruling is, in fact, profoundly good for India. If it is seen that the law is the law and foreign investors can count on it being so, investment will flow into the country in ever increasing amounts. RM and his hideous cohorts might like to reflect on the effect of the ruling going the other way. Oh, wait, they wanted the ruling to go the other way as overpriced unionised jobs may be exported to India, thus reducing their grip on the UK labour market.

  3. No worries. Ritchie will find some sort of brainfart to explain this away…

    Probably a conspiracy of some sort.

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