Vodafone Prevails in $490m Indian Tax Dispute
Vodafone prevails in $490m Indian tax dispute.Reuters

Vodafone has won a $490m tax dispute in India.

The Bombay High Court on 10 October ruled in Vodafone's favour after Indian tax authorities accused Vodafone India Services of under-pricing shares in a rights issue to its parent, and demanded tax of about 30bn rupees ($490m, £306m, €387m)

A division bench of chief justice Mohit Shah and justice M S Sanklecha said: "We feel that there is no taxable income on share premium received on the issue of shares."

Separately, Vodafone is still contesting an over $2bn tax demand over its acquisition of Indian mobile operations, in 2007, from Hong Kong's Hutchison Whampoa.

Vodafone is the biggest foreign corporate investor in India.

In July, Indian finance minister Arun Jaitley's maiden budget said the government will constitute a high-level committee to review retrospective tax claims blamed for obstructing foreign investments into India, particularly after firms like Vodafone, Shell, IBM and Nokia were served with massive tax demands.

India Capex

In April, the British telecoms giant agreed to buy out a minority partner in its Indian arm for $1.48bn.

Prime Metals, the British group's indirect subsidiary in India, acquired minority shareholder Piramal Enterprises' 45.4 million shares in Vodafone India. Piramal exited its investment through the deal.

Earlier in the year, Vodafone India, the nation's second-largest mobile phone carrier, purchased radio airwaves worth over $3bn through a government auction to strengthen its services.

Vodafone bagged airwaves in the premium 900 megahertz band available in three metros – Delhi, Mumbai and Kolkata.