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India slaps 2.1 bln USD tax notice on telecom giant Vodafone

Xinhua, February 17, 2016 Adjust font size:

India has slapped a tax notice of 2.1 billion U.S. dollars on UK telecom giant Vodafone, in what is being dubbed by many as "tax terrorism."

Indian tax authorities have also threatened to seize Vodafone's assets if it fails to pay the tax that is "due" in the notice which was issued earlier this month.

"We can confirm that we have received a tax reminder from the Tax Department that also references asset seizures in the event of non-payment," Vodafone said in a statement on Tuesday.

It added: "This dispute is currently the subject of international arbitration."

In fact, the telecom giant has been locked in a battle with the Indian tax authorities since its 2007 takeover of Hong Kong- based Hutchison Whampoa's Indian mobile unit for 11 billion U.S. dollars.

Vodafone insists the matter was outside the purview of the India's Income Tax department as the transaction took place offshore, an argument reject by the tax authorities.

Though India's Supreme Court had in 2012 ruled in favour of Vodafone, the Indian government that year changed laws to allow firms to be taxed retrospectively. Endit