Vodafone Group Plc has received a final
tax demand of about $604 million from Indian authorities, adding to
its disputes in the country since it bought Hutchison Whampoa's mobile business in 2007.
The British mobile operator would appeal the order soon, it said in a statement on Thursday.
Last year, Vodafone filed a petition in a local court in a so-called transfer
pricing dispute after authorities sought to add Rs 85 billion to the taxable income of a unit, Vodafone India Services, which provided call centre services to some group companies.
Transfer pricing is the value at which companies trade products, services or assets between units. Rules require all cross-border transactions between group companies to be valued at arm's length - or at the same value as if the transaction was with an un-related company.
In September this year, the Bombay High Court extended a stay on a final tax demand order by the authorities.
"Vodafone maintains that there is no tax payable on this transaction and the company will file an appeal before the tax appeal tribunal as soon as possible," the company said. "Vodafone will continue to strongly defend its position against this order."
The company, which is the
largest corporate investor in India, has repeatedly clashed with the authorities over taxes since it bought Hutchison's mobile business and was held liable for the capital gains tax which the authorities say is owed on the deal.
This transfer pricing dispute is separate from the more than $2 billion tax demand on that deal.
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