Vodafone to pay Rs 200 crore by Feb 15

Vodafone to pay Rs 200 crore by Feb 15On Friday, the Income Tax Appellate Tribunal asked Vodafone Group Plc to pay R200 crore in two parts by February 15. This is in addition to furnishing a corporate guarantee undertaking to pay up the entire taxable amount of R3,700 crore in case it loses a transfer pricing case relating to assignment of call options relating to 2007.

According to the tribunal's interim order, Vodafone Group needs to pay R100 crore by January 15 followed by another R100 crore by February 15 along with the bank guarantee.

The notice to pay R3,700 crore in a transfer pricing case was served on Vodafone around a week ago once the dispute resolution panel (DRP), a collegiums of three income tax commissioners that decides on disputes relating to tax matters, ruled in favour of the revenue department. The tax notice was for assessment year 2008-09.

The company had filed its appeal against the DRP's order in the tribunal on December 23.

The case relates to its Indian unit Vodafone India Services (VISPL), which had written agreements (call options) with Analjit Singh, Max Group chairman and Asim Ghosh, Vodafone's former CEO to buy their shares in the company.

Prior to Vodafone, Hutchison, which held the majority stake in the then Hutch-Essar entity, had this agreement, which was transferred to Vodafone when in February 2007 it acquired Hutchison's 67% stake in the joint venture.