Vodafone will get a lifeline from Retrospective Tax Withdrawl
Key Players in the Indian Telecom Industry Vodafone Tax Issue Timeline Indian Govt Decision on Retrospective Tax Key Issues and Arguments Vodafone acquired Hutchinson/Idea/Max in 2007 - 67% share by $ 11Bn Hutchinson Vamco based out in HKG sold 67% of shares driven by assets in India Indian Tax Department called out that Vodafone has to pay Capital gains Tax ( calculated as Rs 7K Crore in 2007, today its Rs 20K Crore liability ) Vodafone said the transaction was made by 2 foreign entities (Hutch/Vodafone) in a tax heaven country When challenged by the Tax department, Vodafone went to the Supreme Court (SC) and won the case by saying that assets transferred in a foreign country can be taxed FM Paranb Mukherjee was hurt ( probably ego ) by this SC ruling and hence he applied his power in govt and legislation to circumvent the SC ruling and prevent the tax from backdating retrospectively Removal of Retrospective Tax by the Indian Govt. will give a lifeline to Vod