Vodafone Hails Supreme Court Judgement; Says Has Confidence in India

NEW DELHI (NNN-PTI) -- UK-based Vodafone Group Plc, the parent company of Vodafone Essar, Friday hailed Supreme Court's ruling to set aside the Bombay High Court judgement asking the company to pay income tax of Rs 11,000 crore.

Vodafone which is the second largest telecom operator in India, said the judgement underpins its confidence in the country.

"We welcome the Supreme Court's decision, which underpins our confidence in India. We will continue to grow our Indian business - including making significant investments in rural areas and in 3G network coverage - for the benefit of Indian consumers," Vodafone CEO Vittorio Colao said in a statement.

The Supreme Court Friday set aside the Bombay High Court judgement asking Vodafone International Holdings to pay Rs 11,000 crore to Income Tax department, on the ground that Indian authorities do not have jurisdiction on an overseas transaction.

Further, the company said, "Vodafone has maintained consistently throughout the legal proceedings that this transaction was not taxable and we are pleased with today's judgement in the Supreme Court."

The court also asked the IT department to return Rs 2,500 crore deposited by Vodafone, in compliance of its interim order, within two months along with 4% interest.

It asked Supreme Court registry to return within four weeks, the bank guarantee of Rs 8,500 crore given by the telecom major.

"We are a committed long-term investor in India and we have made clear all along that we have faith in the Indian judicial system...," Colao added.

Meanwhile, experts said the Supreme Court's verdict in the overseas transaction tax case against Vodafone is likely to boost the foreign investor sentiment in India and give respite to other litigants in similar type of cases.

The apex court today said the I-T Department has "no jurisdiction" to levy tax on overseas transaction between companies incorporated outside India and ruled that Vodafone is not liable for taxes and penalties worth USD 4.4 billion.

Though the government will lose out in terms of revenue, the decision is likely to act as a catalyst for future investments and has sent the right signal to the world, especially to investors who want to invest in India. -- NNN-PTI