The paper takes vodafone–hutch deal as a special case to study the taxation issues in cross border mergers and acquisitions the paper proposes to showcase what lies at the heart of this vodafone–hutch deal, the effect of taxation on such transactions, the way forward of the deal, options for the parties involved, impact. The recent sale of hutchison telecom international's (htil) stake in hutchison essar limited (hel) for approximately $111 billion to vodafone international holdings bv (vodafone) came under the radar of the indian income tax authorities (the it department) earlier this year the case has attracted. The case is too interesting as well as awesome please enjoy reading the case, if any query, then post it on [email protected] New delhi/mumbai: the government introduced a retrospective clarification to the income-tax (i-t) act, 1961, virtually amending the law to ensure that cross- border transactions such as the $1108 billion (around rs55,735 crore today) vodafone-hutchison deal are taxable the supreme court had ruled.
The paper takes vodafone–hutch deal as a special case to study the taxation issues in cross border mergers and acquisitions ii tax treaty shopping – how far legal and ethical and the present tax law in india is in this regard it discusses about structuring the transactions historical background given the role that mergers. Vodafone, one of india's largest corporate investors, has been involved in a string of tax disputes in india since it bought in 2007 hutchison's local mobile business to enter into the world's second-biggest market for mobile phone users in the long-running dispute, the telecoms group was held liable for. The supreme court today ruled in favour of vodafone in the $2 billion tax case saying capital gains tax is not applicable to the telecom major the apex court also said the rs 2, 500 crore which vodafone has already paid should be returned to vodafone with interest (watch special analysis by arijit barman.
New delhi: in a major victory to vodafone international holdings, the supreme court on friday set aside the bombay high court judgement asking the company to pay income tax of rs 11,000 crore, holding that tax authorities do not have jurisdiction on an overseas transaction a three-judge bench. In the vodafone case, 51 per cent of hutchison essar ltd (hel) was directly owned by the hutchison group of hong kong through a multiple layer of companies and ultimately by a company incorporated in the cayman islands this was not the result of any devious tax planning scheme but the.
In a 25 billion dollar sigh of relief for vodafone, and for other companies eyeing assets in india, the supreme court has ruled in favour of vodafone the court has said that the indian tax department cannot tax the transaction that saw vodafone acquire 67 per cent stake in hutchison essar, a mobile phone. Cgp indirectly held a 67% interest in the then hutch essar limited (now vodafone essar limited) through a number of downstream subsidiaries and call in the facts of the instant case, the supreme court concluded that the sale of cgp cannot be said to be aimed at evading taxes in india, as the same. Impact factor: 6047 volume 5, issue 1, january 2017 international journal of advance research in computer science and management studies research article / survey paper / case study available online at: wwwijarcsmscom vodafone acquisition of hutch-india: a turbulent wave in indian telecom market. As reported by taxsutra first, the government has filed a review petition against the supreme court ruling in vodafone tax case, terming the judgment as one that almost each and every argument advanced by vodafone counsel harish salve , chief justice kapadia has unequivocally called the hutch – vodafone deal as.
A case study vodafone v/s income tax authority of india – a pandora's box msrajeshwari bandaru lecturer, bharati vidyapeeth's, bharati in hutch essar and also examines the acquisition route adopted by vodafone in order to avoid payment of capital gains tax to the extent of two billion dollars which. Income tax department seeks rs 32,320 crore from hutchison over vodafone deal et bureau| updated: aug 30, 2017, 1236 am ist 0comments vodafone had in 2007 acquired 67 per cent stake in the mobile-phone business owned by hutchison whampoa, now part of ck hutchison mumbai: india's income tax. Facts of the case:'hutchison (hongkong)' is a non resident having no tax implications in india 'cayman island (mauritius)' was a 100 % subsidiary of hutchison (hongkong) hutchison essar was an indian co in which cayman island (mauritius) was holding 67 % shares and essar had total holding of 33.
Much has been said about the vodafone case, especially on the legitimacy of india's right to tax the hutchison gains this paper steers clear of that debate incontrovertibly, the vodafone case presents the indian courts with a choice – to either tax the he also refers to scholars associated with critical legal studies. Tax alerts: the vodafone case share the hutch-vodafone deal took place in 2007 that involved the transfer of shares of a foreign company outside india, which indirectly held the shares of an indian company in one of india's biggest tax controversies, the tax authority is demanding approximately us$25 billion in capital. In this blogpost, mohammed azharuddin, legal counsel at borderless access panels pvt ltd and a student of diploma in entrepreneurship administration and business laws by nujs, writes about, the case study of how did vodafone avoid capital gains tax through clever structuring azhar - pic in order to.
So, while optically it was a pure offshore transaction between two non-resident entities (vodafone and hutchison) and they bought and sold shares of another non-resident entity (cgp), the indian tax authorities took a position that by virtue of such an offshore deal, in effect and in substance, the parties have. The i-t department has issued vodafone a reminder over its rs 14,200-crore tax demand and threatened to seize assets in the case of non-payment the british telecom major has disputed the tax demand over its acquisition of 67 per cent stake in hutchison, now called vodafone india, arguing that no. How vodafone won the tax case: the inside story of the courtroom battle in a manner to avoid taxes the two judges also said that the shares that gave vodafone control over hutch's telecom business in india were registered outside the country—in cayman islands and then they turned their attention to.
Lawyers would have to go back to the drawing board to come up with new and valid tax efficient structures, agreed almt legal partner hitesh jain, who had previously also advised vodafone on the case bhatia commented that structures such as the one in the vodafone hutch acquisition were used in. It is a landmark case that will severely impact the mergers & acquisitions (m&a) landscape in india no matter which way it goes, the vodafone versus it department tax case will have an indelible impact on the m&a landscape of india last year british telecom giant vodafone paid hong kong based hutchison international. Vodafone was embroiled in a $25 billion tax dispute over its purchase of hutchison essar telecom services in april 2007 the transaction involved purchase of assets of an indian company, and therefore the transaction, or part thereof was liable to be taxed in india as per the allegations of tax department vodafone group. The government has proposed an amendment to the income tax act from april 1, 1962 that would allow it to tax transactions like vodafone's acquisition of hutch giving his view on the vodafone tax case, finance minister pranab mukherjee told ndtv profit that the intention of legislature is if you pay tax in.