NEW DELHI (Reuters) - Vodafone Group Plc (VOD.L) will seek next week to challenge a retrospective change to Indian tax law as it fights a 2 billion tax bill on its purchase of a controlling stake in an Indian mobile operator last year.
The Bombay High Court is scheduled to resume hearings on June 23 in a case which is being closely watched by international investors, after adjourning it in March.
Vodafone said in a statement on Friday it had submitted an amended writ petition challenging the "constitutionality of the retrospective amendment of the changed tax law" to the High Court on June 12.
It said the court had asked the tax department to respond within a week and the next hearing was due on June 23.
In May this year, the Indian parliament passed an amendment to a bill to allow the government to take action against companies which do not withhold taxes when making a transaction.
Vodafone, the worlds largest mobile phone company by sales, last year paid 11.1 billion to a unit of Hong Kongs Hutchison Whampoa (0013.HK) for the controlling stake in the mobile operator, which has since been renamed Vodafone Essar.
The company has said Indian law at the time did not require it to withhold tax on the acquisition, and has said that capital gains tax is usually paid by the seller, not the buyer.
Indias tax department has argued that Vodafone was liable to pay capital gains tax as most of the assets involved are based in India, and that Indian tax law requires buyers to withhold capital gains tax liabilities and pay them to the government.
(Reporting by Devidutta Tripathy; Editing by John Mair; Editing by Quentin Bryar)
The Bombay High Court is scheduled to resume hearings on June 23 in a case which is being closely watched by international investors, after adjourning it in March.
Vodafone said in a statement on Friday it had submitted an amended writ petition challenging the "constitutionality of the retrospective amendment of the changed tax law" to the High Court on June 12.
It said the court had asked the tax department to respond within a week and the next hearing was due on June 23.
In May this year, the Indian parliament passed an amendment to a bill to allow the government to take action against companies which do not withhold taxes when making a transaction.
Vodafone, the worlds largest mobile phone company by sales, last year paid 11.1 billion to a unit of Hong Kongs Hutchison Whampoa (0013.HK) for the controlling stake in the mobile operator, which has since been renamed Vodafone Essar.
The company has said Indian law at the time did not require it to withhold tax on the acquisition, and has said that capital gains tax is usually paid by the seller, not the buyer.
Indias tax department has argued that Vodafone was liable to pay capital gains tax as most of the assets involved are based in India, and that Indian tax law requires buyers to withhold capital gains tax liabilities and pay them to the government.
(Reporting by Devidutta Tripathy; Editing by John Mair; Editing by Quentin Bryar)
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