UK-based mobile major Vodafone has sought an extension until January 29 next year to reply to a tax claim notice issued last month by the Income-Tax Department, the Lok Sabha was informed.
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.
A notice was issued to VIH BV to show cause why the I-T Department cannot proceed against it for default of non-deduction of tax at source from the payment made to Hutchison Telecom International Ltd (HTIL) for acquiring the controlling interest and other assets of HTIL in Indian telecom company Hutchison Essar Ltd. “VIH BV was also asked to show cause why it should not be treated as an assessee in default for its failure to deduct and pay the tax,” Palanimanickam said.
Vodafone acquired a 67 per cent stake in Hutchison Essar from Hutchison Telecommunications International, in May 2007. Vodafone has always maintained that, because the deal took place between CPG, which is registered in the Cayman Islands, and Vodafone International, which is based in the Netherlands, it is not liable to pay tax in India.