India Court Backs Vodafone in $1.3 Billion Tax Spat, BTVI Says

  • Bombay High Court rules on Vodafone transfer pricing case
  • India is seeking to curb a reputation for `tax terrorism'

An Indian court ruled in favor of Vodafone Group Plc in an 85-billion-rupee ($1.3-billion) tax case, Bloomberg TV India reported.

The Bombay High Court on Thursday passed the verdict on a transfer pricing case between the British phone carrier and the government, the channel said. 

“We hope the government won’t file an appeal,” Balbir Singh, Vodafone’s lawyer, told Bloomberg TV India.

In January, India’s Cabinet said the authorities wouldn’t appeal an earlier case that went in Vodafone’s favor, seeking to bring clarity and predictability to the nation’s tax regime. Prime Minister Narendra Modi’s government has pledged stable and competitive tax rules to woo investment, after earlier high-profile spats with multinational companies tarnished the nation’s allure.

“Vodafone welcomes today’s decision by the Bombay High Court,” Suresh
Rangarajan, Vodafone India’s spokesman, wrote in an e-mail.

International transactions involving overseas companies and their Indian units spark transfer pricing questions about how to value the deals for tax purposes.

A separate dispute over capital gains from Vodafone’s 2007 acquisition of Hutchison Whampoa Ltd.’s Indian business is going into international arbitration, Vodafone spokesman Ben Padovan said in April.

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