The Vodafone logo can be seen on top of a building outside Madrid, Spain.

Vodafone scores a victory in $3 billion tax dispute with India

Vodafone Group Plc. received a vital victory in a years-long tax dispute with the Indian authorities, a improvement that might probably save the UK wi-fi service virtually $Three billion.

An worldwide arbitration tribunal dominated Friday that India’s efforts to say 200 billion rupees ($2.7 billion) in previous taxes had been in breach of truthful therapy beneath the bilateral funding safety pact between the south Asian nation and the Netherlands, in response to a lawyer representing the corporate within the case. The tribunal has additionally requested India to halt its efforts to say the tax dues. India can attraction.

Shares of Vodafone Idea Ltd., Vodafone’s money-losing India unit, jumped 14% in Mumbai after CNBC-TV18 reported the ruling, the most important achieve since Sept. 3.

The ruling might ease the burden on Vodafone’s India enterprise at a vital time when it’s already going through a requirement for billions of {dollars} in back-fees India’s Supreme Court ordered it to pay final October in a separate case. The three way partnership between Vodafone and billionaire Kumar Mangalam Birla’s conglomerate has been weighed down by a $7.eight billion invoice from the federal government — largest amongst friends — eight straight quarterly losses and over $14 billion of debt.

“Vodafone has finally got justice,” mentioned Anuradha Dutt, managing associate of DMD Advocates, a New Delhi-based agency which argued for Vodafone. “They have held that the government trying to recover from Vodafone the tax, interest, and penalty, is unfair and it breaches the fair and equitable standards laid down by international law.”

A Vodafone spokesman in London confirmed the tribunal has dominated within the firm’s favor. “The award is confidential,” he mentioned. “We are studying the lengthy documents and can make no further comment at this time.”

A spokesperson for India’s finance ministry didn’t reply calls in search of touch upon the arbitration courtroom ruling.

This marks the newest twist in over a decade-long tax dispute that began when Vodafone entered India by buying Hutchison Whampoa’s Indian operations in 2007 and was slapped with this tax invoice. Vodafone disputed this tax demand and the nation’s Supreme Court agreed that no native regulation supported the levy of this tax. But the then Finance Minister Pranab Mukherjee amended the tax guidelines to use retrospectively, triggering a authorized battle that ended up within the Hague arbitration courtroom.

Source