Vodafone appeals tax ruling in High Court

India (AP):

British telecom giant Vodafone Group Plc said it appealed to India's Supreme Court yesterday to overturn a ruling that it is liable for up to $2.6 billion in back taxes.

The case is being closely watched by foreign companies that fear it will set a precedent that could make them liable for retroactive changes in the application of Indian tax law.

In a landmark ruling last week, the Bombay High Court ruled that Vodafone had to pay taxes on a May 2007 deal in which its Dutch subsidiary, Vodafone International Holdings BV, acquired a 67 per cent stake in CGP Investments Ltd., a Cayman Islands company. CGP held the India telecom assets of Hong Kong's Hutchison Telecom-munications International Ltd.

Vodafone maintains that it does not owe tax on the $11 billion transaction because it took place between two foreign entities.