Friday , February 21, 2020 |   08:30:08 IST
INTL TAXATION INTL MISC TP FDI LIBRARY VISA BIPA NRI
About Us Contact Us Newsletters
 
NEWS FLASH
 
TP - Without considering full factual aspect of services involved in international transaction, TP adjustment cannot be proposed: ITAT (See 'Breaking News') I-T - TDS on remittance paid to foreign tax resident not having a PE in India does not fall in hand of tax resident of India: ITAT (See 'Breaking News') I-T Variation u/s 144 beyond scope of DRP, donot rise questions with respect to assessee's beneficial ownership of royalty under India-Cyprus DTAA: ITAT (See 'Breaking News') GST - Sec 50 Imbroglio - CBIC, GSTN & Taxpayers - All three to be blamed! (See 'THE COB(WEB)' in TIOL) EU puts Cayman Islands on tax haven blacklist TP - Assessment order passed in respect of international transactions, without referring matter to TPO as per Section 92CA, is unsustainable: ITAT (See 'Breaking News') I-T - Remand ordered by ITAT solely to examine whether or not assessee has PE in India, is not tenable, where it could have looked into such issue on its own: HC (See 'Breaking News') TP - Harbour Rules u/s 92CB for software development services restricted to lower turnover cap in absence of change in business model: ITAT (See 'Breaking News') TP - ALP needs to be determined for long credit period on trade receivables as international transaction: ITAT (See 'Breaking News') Volume of corporate debt goes up to USD 13.5 tr but quality dips: OECD Study (See 'Brief') TP - Rate of Royalty paid for a Trademark shall be governed by similar rate adopted by assessee in prior period: ITAT (See 'Breaking News') TP - ALP adjustment u/s 92CA(3) cannot claim deductions u/s 10A or 10B: ITAT (See 'Breaking News') IMF's fiscal ideas for Japan February 14, 2020 (See 'Brief') TP - Disallowance on fees for technical services can be governed by prior orders passed in the assessee's own case: ITAT (See 'Breaking News') I-T - Provisions of DTAA shall prevail on conflict with section 206AA of the IT Act: ITAT (See 'Breaking News') I-T - Upon converting company to LLP, tranferring equity shares to partnership qualifies as transfer u/s 2(47) of I-T Act: AAR (See 'Breaking News') Concessional corporate tax rate for domestic companies - CBDT notifies new FORMs 10-IC & 10-ID for exercising option (See 'Bulletin Board') Overhaul of global tax rules to adversely impact Ireland's tax receipts: OECD (See 'Brief')
 
TII SEARCH
 
 
   
Home >> News Brief
 

Saga of Retrospective effect in Vodafone case to continue
By TII News Service
Sep 11, 2019 , Hong Kong

    

THE Vodafone India retrospective income tax case has not made headway if latest disclosure made by Hong Kong-based CK Hutchison Holdings (CKHH) group is any indication. The disclosure about the case has been made by CK Hutchison International (19) (II) Limited (CKHIL) in its offering memorandum to global subscribers of its twin-bonds issue dated Sep 03, 2019. The company is wholly owned subsidiary of CKHH Limited. Both are incorporated in Cayman Islands. CKHH was incorporated in 2015 as part of the reorganization and combination of Cheung Kong, Hutchison and their respective subsidiaries, associated companies and joint ventures.

The case has its origin in 2007 sale of entire stake in Hutchison Telecommunications International Limited (HTIL) by CKHH's company CGP Investments (Holdings) Limited to Vodafone Group Plc's Dutch subsidiary. The deal was completed for a totalcash consideration of about $11.1 billion. HTIL had realized a pre-tax gain of about $8.89 billion from this deal. CGP, through its subsidiaries, held indirectly majority stake in Vodafone's Indian operations then known as Vodafone Essar group.

Indian Income Tax Department (ITD) initiated an investigation into Vodafone Netherlands' obligations to withhold tax from the acquisition proceeds. Vodafone Netherlands disputed ITD's jurisdiction in this matter by filing a Writ Petition with the Bombay High Court. On Jan 20, 2012, the Indian Supreme Court gave its ruling that the ITA did not have the jurisdiction as the sale was not taxable in India. On May 28, 2012, the Government amended Income Tax Act to create retrospective provision for levy and collection of withholding tax in such cases. ITD first served retrospective tax demand on Vodafone group. Later, ITD also served separate demand notice on HTIL.

CKHIL's offering memorandum says: "If, as a consequence of the Retrospective Provisions, Vodafone Netherlands is required to pay taxin India, this could lead to a dispute between Vodafone Netherlands and HTIL (Vodafone Dispute)". HTIL received ITD's assessment order (AO) dated Jan 25, 2017 in respect of the same transaction. The AO imposes tax of approximately Rupees 79 billion (US$1.185 billion) on theafore-mentioned gains as well as interest on the unpaid CGT (capital gains tax) of approximately Rs 164.3billion (US$2.46 billion). HTIL also received a penalty order from the ITD dated July 3, 2017 for a penalty of approximately Rs 79 billion (US$1.185 billion) relating to the CGT.

As put by CKHIL, "HTIL believes that the Taxes cannot be validly imposed, and it has obtained legal advice that the AO and the PO cannot create any liability for taxes, interest, penalties or otherwise that is legally enforceable". It adds: “CKHH has not made a provision in respect of either (i) any Taxes that may arise as a consequence of the Retrospective Provisions or (ii) the Vodafone Dispute. If HTIL is eventually required to make apayment in respect of these items, there may be a material adverse effect on CKHH's financial condition and results of operations".

 
 
INTL TAXATION INTL MISC TP FDI LIBRARY VISA BIPA NRI TII
  • DTAA
  • Circulars (I-T Act, 1922)
  • Limited Treaties
  • Other Treaties
  • TIEAs
  • Notifications
  • Circulars
  • Relevant Portion of I-T Rules,1962
  • Instructions
  • Administrative Orders
  • DRP Panel
  • I-T Act, 1961
  • MLI
  • Relevant Portion of I-T Act,1922
  • GAAR
  • OECD Conventions
  • Draft Guidelines
  • DTC Bill
  • Committee Reports
  • FATCA
  • Intl-Taxation
  • Finance Acts
  • Manual on EoI
  • UN Model
  • Miscellaneous
  • Cost Inflation Index
  • Union Budget
  • Information Security Guidelines
  • APA Annual Report
  • APA Rules
  • Miscellaneous
  • Relevant Sections of Act
  • Instructions
  • Circulars
  • Notifications
  • Draft Notifications
  • Forms
  • TP Rules
  • APA FAQ
  • UN Manual on TP
  • Safe Harbour Rules
  • US Transfer Pricing
  • FEMA Act
  • Exchange Manual
  • Fema Notifications
  • Master Circulars
  • Press Notes
  • Rules
  • FDI Circulars
  • RBI Circulars
  • Reports
  • FDI Approved
  • RBI Other Notifications
  • FIPB Review
  • FEO Act
  • INTELLECTUAL PROPERTY
  • CBR Act
  • NBFC Report
  • Black Money Act
  • PMLA Instruction
  • PMLA Bill
  • FM Budget Speeches
  • Multimodal Transportation
  • Vienna Convention
  • EXIM Bank LoC
  • Manufacturing Policy
  • FTDR Act, 1992
  • White Paper on Black Money
  • Posting Policy
  • PMLA Cases
  • Transfer of Property
  • MCA Circular
  • Book Review
  • Limitation Act
  • Type of Visa
  • SSAs
  • EPFO
  • Acts
  • FAQs
  • Rules
  • Guidelines
  • Tourist Visa
  • Notifications
  • Arbitration
  • Model Text
  • Agreements
  • Relevant Portion of I-T Act
  • I-T Rules, 1962
  • Circulars
  • MISC
  • Notification
  • About Us
  • Contact Us
  •  
     
    A Taxindiaonline Website. Copyright © 2010-2020 | Privacy Policy | Taxindiainternational.com Pvt.Ltd. All rights reserved.