I-T slaps ~32,230-cr demand on Hutch
The I-T wing has slapped a ~32,230-crore demand
in tax, interest and penalty on Hong Kongbased Hutchison for alleged capital gains it made on the $11-billion sale of its mobile business in India to the UK’s Vodafone Group in 2007. CK Hutchison Holdings said its unit, Hutchison Telecom International, had been served with a tax demand of about ~7,900 crore, ~16,430 crore of interest, and another ~7,900 crore in penalty.
The income-tax (I-T) department has slapped a ~32,230crore demand in tax, interest and penalty on Hong Kongbased Hutchison for alleged capital gains it made on the $11-billion sale of its mobile business in India to United Kingdom’s Vodafone Group in 2007.
In a filing to the Hong Kong stock exchange, billionaire Li Ka-shing’s CK Hutchison Holdings said its unit, Hutchison Telecommunications International (HTIL), has been served with a tax demand of about ~7,900 crore, ~16,430 crore of interest, and another ~7,900 crore in penalty. The CK Hutchison unit continues to dispute the validity of those taxes, it said. This is the first time a tax demand on the Hong Kong firm is being raised.
So far, the Indian government had been pursuing the tax from Vodafone.
Vodafone was initially slapped with ~7,990-crore tax demand for not withholding tax from payments it made to Hutchison. The outstanding, after including interest and penalty, runs over ~20,000 crore. It challenged the levy, and the Supreme Court in January 2012 ruled that the company was not liable to pay any tax over the acquisition of assets in India from Hutchison.
Thereafter, the government in May 2012 amended the tax laws with retrospective effect and claimed taxes. Vodafone has disputed such levy, and the matter is before an international arbitration panel. Besides Vodafone, the retrospective legislation was used to levy a principal tax liability of ~10,247 crore on another British company, Cairn Energy Plc.
Vodafone was initially slapped with ~7,990-cr tax demand for not withholding tax from payments it made to Hutchison