A further twist in the tumultuous case of Vodafone and the Indian tax authority.
After deciding to scrap conciliation talks with Vodafone India just two weeks ago, the Indian government has put the offer back on the table – just as the opposition Bharatiya Janata Party (BJP) is making noise about resolving these kinds of conflicts if it comes to power following this year’s general election.
It is just the latest in a protracted $2.6bn dispute over capital gains taxes allegedly due in connection with Vodafone’s acquisition of Hutchison Essar back in 2007. Continue reading »
Thought Vodafone India had had its fair share of disputes with Indian telecoms regulators? Well, it’s not done yet.
The Indian arm of the British service provider has now been fined Rs12.6bn ($220m) by India’s Department of Telecommunications for allegedly understating revenues in the 2008-09 and 2010-11 fiscal years, according to local press reports. Continue reading »
Just days after taking over at the Law Ministry, Kapil Sibal has said it would be legal for the Rs112bn tax dispute with Vodafone to be solved via conciliation, overturning the decision of his predecessor, Ashwani Kumar.
On the face of it, this sounds like we’re approaching a conclusion. But foreign investors, for whom this is a test case, shouldn’t breathe a sigh of relief quite yet. Continue reading »
As mobile phones approach worldwide ubiquity, it’s easy to see that the countries with the biggest populations will have the most connections, with China and India in the lead.
But which companies are serving those customers? And which ones are set to capitalise on the growth in emerging markets? Chart of the week dials in. Continue reading »
It looks like India’s controversial decision to retrospectively tax Vodafone to the tune of $2.2bn may result in more than just sternly-worded comments from the likes of George Osborne and Timothy Geithner.
New Delhi’s plans for strengthening economic ties with key partners through new bilateral investment treaties are being put on hold – starting with Canada, whose prime minister Stephen Harper is visiting the sub-continent this week. Continue reading »
Another day, another delay in the organisation of the upcoming 2G spectrum auction in India – a consequence of the corruption-plagued auction of 2008 that led to the jailing of the then-telecoms minister and the revocation of 122 spectrum licences.
On Monday, Sharad Pawar, farm minister, became the latest politician to throw a wrench into the political machine: he resigned from heading the so-called “empowered group of ministers” that has been convened in order to determine the base rates at which the spectrum is to be auctioned. Continue reading »
Most companies prefer to keep their hands off corrupted, poorly regulated and underdeveloped countries. But for others, it’s exactly there where they make their money.
That’s the lesson from the different fortunes in different countries of M-Pesa, the widely celebrated mobile payment system brought to us by Safaricom, the Kenyan subsidiary of Vodafone. Continue reading »
Just when Hungary’s telecos were beginning to think they could live normally – the sectoral “crisis” tax imposed in 2010 is due to end soon: wham, they get hit again. So György Beck, Vodafone’s local chief executive, told Hungary’s ATV on Tuesday night. Continue reading »
The Indian government is standing firm on its call for Vodafone to pay taxes on its 2007 acquisition of Hutchinson’s India business – and it could cost the telecom operator as much as $3.75bn.
RS Gujral, the finance secretary, on Wednesday told news channel NDTV that there was “no question of [the] government negotiating” on its demand that Vodafone pay back $1.46bn taxes on the $10.7bn acquisition, plus a $1.46bn penalty and interest of at least $800m. Continue reading »
The day after India’s telecoms regulator threw the industry into turmoil by announcing sky-high prices for 2G spectrum – at $687m per MHz, 13 times higher than 2008 prices – it was the Supreme Court’s turn.
On Tuesday, the justices ordered the government to hold the 2G auction by August 31 – far sooner than the early-2013 Delhi had requested. Continue reading »
George Osborne, the UK’s finance minister, has added his voice to the chorus warning that India’s plans for retrospective taxation of deals like Vodafone’s 2007 purchase of Hutchinson Essar will hurt investment sentiment towards the country. Continue reading »
The big guns of international business have fired a salvo at India and the controversial tax plans contained in last month’s budget bill.
In an unprecedented move, seven business associations from the US, the UK, Canada, Japan and Hong Kong, have written to Indian prime minister Manmohan Singh warning him against going against international practice and endorsing “retroactive” tax rules.
They say some companies have already begun to re-evaluate their investments – and others could follow suit in “a widespread reconsideration of the costs and benefits of investing in India”.
That’s pretty much as strong as it gets in global business diplomacy, where companies are generally loathe to blast government policies so publicly. But the stakes have rarely been as high as they now are in India. Continue reading »
By Gokul Chaudhri
Pranab Mukherjee, India’s finance minister, stated in his national budget announcement on Friday that the life of a finance minister is not easy, and that crafting economic policy often requires one to do things that may be painful in the short run, but may be good in the long run.
Investors in India Inc will discover that as a result of this budget they may need to bear the effects of some serious extra tax burdens in the coming year. Continue reading »
Into a budget generally described as “balanced” or “modest” (not the most ringing endorsement but more on that later) the Indian government seems to have slipped one bombshell: retrospective taxation of overseas transactions which involve assets primarily in India.
The measure is open to interpretation but to many analysts the underlying message was clear: “Vodafone – and others – we are coming to get you.” Continue reading »