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Vodafone liable to pay tax to Government of India

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The Income Tax Department of the Government of India has sent a notice to Vodafone, seeking around US$ 1.7 billion as capital gains tax related to the sale of Hutchison Telecom International Ltd's (HTIL) 67 per cent stake in Hutch-Essar, now renamed Vodafone-Essar. However, the Vodafone has contested this notice and approached the Bombay High Court.

The Government of India is claiming that Vodafone has liability of a payer, indicating that Vodafone should have deducted tax at source before making payment to Hutchison and submitted to the government. However, Vodafone is claiming that it is the seller who should be taxed; and the seller is not neither Essar Group, nor Vodafone, nor Vodafone- Essar.

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