UK seeks stable tax regime

Posted By: Pti
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New Delhi, Jan 19 (PTI) With British telecom majorVodafone being entangled in a tax dispute, Britain today askedIndia to provide a stable taxation regime and said it islooking for "good" outcome from courts.

Emerging from a meeting with Commerce Minister AnandSharma, UK Business Secretary Vince Cable when asked about hisviews on Vodafone issue said, "We have talked about it, but itis a matter for the courts in the first instance.

"I think, simply to acknowledge Vodafone is an importantcompany in India, that joint venture is one of the mostrapidly growing and like other foreign investors, they need tohave stability in the tax regime. We discussed this in a veryamicable way. I think we look forward to a good outcome."

Vodafone is contesting over Rs 11,200-crore tax claimby the income tax department. The case relates to Vodafone''spurchase of 67 per cent of Hong Kong-based Hutchison''s stakein Hutchison Essar for USD 11.2-billion through a CaymanIslands entity in 2007.

The transaction took place between Vodafone InternationalHoldings BV of Netherlands and HutchisonTelecommunications International Limited.

Indian taxmen contended that Vodafone owed taxes fromthe purchase and the matter is now before the country''sSupreme Court.

Vodafone has consistently maintained that it does notneed to pay any tax as the transaction took place between twooverseas companies and the Indian tax department has nojurisdiction over transactions such as the one it effected.

India''s Income Tax department, however, contends thatthat Vodafone owes the Indian Government taxes to the tune ofover Rs 11,200-crore.

In November last year, the Supreme Court had directedVodafone, which is contesting the tax demand to deposit Rs2,500 crore, along with a bank guarantee of Rs 8,500 crore,before it within eight weeks for adjudication of its suit. PTIRR AKH SKB RAH NS

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