Vodafone ordered to pay $553 million by Indian court

Vodafone has today been ordered to pay 25 billion rupees ($553 million) by the Indian Supreme Court over outstanding taxes owed from an acquisition several years ago.

The tax authorities in India claimed that Vodafone owed a massive 112.18 billion rupees ($2.5 billion) in tax over its acquisition of a majority share of 67 percent of telco Hutchinson Essar, which is now known as Vodafone Essar.

The buyout occurred in 2007, sparking an intense battle between the mobile operator and the Indian tax office that has resulted in a lengthy legal dispute.

Vodafone is also required to submit 85 billion rupees ($1.9 billion) worth of bank guarantees within eight weeks, which will cover the remainder of the $2.5 billion the tax collectors are demanding.

“Vodafone is confident that there is no tax liability resulting from this transaction and all the tax and legal advice it has received remains consistent with this view,” said a spokesperson for Vodafone.

The case was also adjourned until February 24 of next year, where Vodafone is hoping it will be acquitted of the tax charges and will recoup the 25 billion rupee deposit paid today with any interest that would have been gained on it from now until the end of February.

Vodafone was also at the heart of a major tax battle in the UK, where it owed a whopping £6 billion  ($9.6 billion). It managed to get off scot-free in that case, which didn’t go down well with the general public, who forced the closure of the Oxford Street Vodafone store. Vodafone is clearly hoping for a similar payment-free outcome in India, where the amount owed is significantly smaller.