On October 30, 2009, the Income-Tax Department issued a notice to Vodafone International Holdings BV (VIH BV) over its 11.2-billion dollar purchase of Hutchison Telecom’s Indian operations (Vodafone Essar) in 2007. “Vodafone International Holdings BV (VIH-BV) was required to file its explanation by November 16, 2009. However VIH BV has requested for further time till January 29, 2010,” Minister of State for Finance S S Palanimanickam said in a written reply to the Lok Sabha.

The Income Tax department has issued a detailed notice today (comprising 531 pages along with annexure running into 1901 pages) under section 201(1) and 201(1A) of the IT Act 1961 to Vodafone International Holdings BV(VIH BV) requiring it to show cause as to why it should not be held that the Department has competent jurisdiction to proceed against it for the default of non-deduction of tax at source from the payment of USD 11.2 billion made on 8th May 2007 to Hutchison Telecommunications International Ltd (HTIL) for transfer of interest in the Indian company Hutch Essar Ltd (HEL).

Where the assessee company itself admits that it is liable to deduct tax at source u/s 194H in respect of post-paid services rendered through its distributors, it is the duty of the assessee to prove that the services rendered by the assessee through the distributors on pre-paid package is different from the post paid package so as to qualify the former for exemption from operation of section 194H; therefore, if post-paid scheme is subject to section 194H, it is quite unlikely that pre-paid system would be outside the purview of section 194H.

SUMMARY OF CASE LAW Where the assessee company itself admits that it is liable to deduct tax at source u/s 194H in respect of post-paid services rendered through its distributors, it is the duty of the assessee to prove that the services rendered by the assessee through the distributors on pre-paid package is different from [...]

SUMMARY OF THE AAR This alert summarizes a recent ruling of the Authority for Advance Ruling (AAR) [2009-TIOL-12-ARA–IT] in the case of K.T. Corporation (Applicant) on the issue of whether a Liaison Office (LO), acting as a communication channel, will constitute a Permanent Establishment (PE) of the Applicant under the Double Taxation Avoidance Agreement between [...]

The Department of Telecom will appoint special auditors this week to verify the revenue figures of Bharti Airtel, Vodafone Essar, Idea Cellular and Tata’s telecom companies, which operate in different areas of communications. The special auditors will be from the CAG panel, a senior DoT official told PTI .

Citing the Supreme Court order in the Vodafone case, the Bombay High Court today dismissed the SABMiller writ petition against a showcause notice issued by the Income Tax Department. CNBC-TV18′s Ashwin Mohan reports on how this matter is similar to the Vodafone case? This case is similar to the Vodafone tax tussle. The Income Tax [...]

In a move to plug loopholes that led to the alleged tax evasion by telecom giant Vodafone, the Income-Tax Department will make it mandatory for firms to submit information to it online before remitting payments to foreign companies, from July this year. “The information … shall be furnished electronically to the website designated by the [...]

Buoyed by a favourable Supreme Court order in the Vodafone tax case, the income-tax department has asked E*Trade Mauritius to pay capital gains tax on the sale of its shares held in Indian company IL&FS Investsmart to HSBC in September 2008. E*Trade Mauritius is indirectly held by E*Trade Financial Corporation and is in the business [...]

The income tax (I-T) department has widened the scope of the investigation of the tax liability on Vodafone-Essar, India’s fourth-largest mobile service provider, to other offshore transactions associated with Vodafone’s buyout of Hutchison Whampoa’s 67 per cent stake in an $11.08 billion deal in 2007. Sources close to the development said the department had sent [...]