India Court Adjourns Vodafone India Transfer Pricing Case To Oct 5

An Indian high court has adjourned the hearing of Vodafone India transfer pricing case to October 5 and would pronounce its verdict on that day.

The case relates to Rs 8,500-crore transfer pricing case involving Vodafone India Services Pvt. Ltd and the Indian government .

In February, Vodafone had challenged I-T Department’s jurisdiction in issuing a draft transfer pricing order. The department had sought Rs 8,500 crore additional to the taxable income of Vodafone.

The draft transfer pricing order, issued in December 2011, related to transaction on Vodafone’s call centre business.

The income-tax department’s draft transfer pricing order, issued in December, related to a transaction on Vodafone’s call centre business. Indian companies pay 30 per cent tax on their income and a 3 per cent surcharge.

There are large number of incidences of disputes relating to transfer pricing as it is often difficult to arrive at a price agreeable to both the I-T department and the companies.

For Vodafone, the development was a fresh blow, as it was already facing a tax liability of Rs 11,000 crore for purchase of Hutch’s mobile operations in India. In 2007, Vodafone Group bought Hutchison Telecommunications’ 67 per cent equity stake in Hutchison Essar for $11.1 billion.