British telecom major Vodafone is facing taxing times with the Indian revenue authorities.
It is fighting a second case over transfer pricing at the high court (HC) in New Delhi. The tax claims on the company total Rs 15,500 crore (Rs 155 billion).
The dispute over the tax payable for its purchase in 2007 of the 67 per cent stake in Hutch is on an amount of Rs 11,200 crore (Rs 112 billion).
It also has a pending transfer pricing dispute on Rs 4,200 crore (Rs 42 billion) for the assessment year 2008-09.
The latest transfer pricing matter has a Rs 370-crore (Rs 3.7 billion) claim for the assessment year of 2009-10.
In both these matters, the tax department believes shares transferred by the Pune business unit to its parent company was not done with arms-length pricing.
A petition filed by Vodafone on the first transfer pricing case, was dismissed by the HC in Mumbai last month, asking them to go back to the tribunal.
The court is presently hearing the second case. The company did not respond to queries sent on this matter.
Legal experts say additions to the tax claim can go on.
“Issues like share transfers might not happen every year.
But the department considers the income as a loan by the parent company to the subsidiary and interest on that could accrue every year,” said Ajit Tolani, partner at Economic Laws Practice.
In the Hutchison stake purchase, the Supreme Court had given Vodafone a favourable verdict but the government then re-worked