Income Tax dept. seeks ₹32,320 cr from Hutchison over Vodafone deal

The Income Tax Department has slapped a ₹32,320 crore demand in tax, interest and penalty on Hong Kong-based Hutchison for alleged capital gains it made on the $11 billion sale of its mobile business in India to U.K.’s Vodafone Group in 2007.

In a filing to the Hong Kong stock exchange, billionaire Li Ka-shing’s CK Hutchison Holdings Ltd. said its unit, Hutchison Telecommunications International Ltd. (HTIL) has been served with a tax demand of about ₹7,900 crore, ₹16,430 crore of interest and another ₹7,900 crore in penalty.

The CK Hutchison unit continues to dispute the



validity of those taxes, it said.

This is the first time a tax demand on the Hong Kong firm is being raised. So far, the Indian government had been pursuing the tax from Vodafone.

Vodafone was initially slapped with ₹7,990 crore tax demand for not withholding tax from payments it made to Hutchison. The outstanding after including interest and penalty runs over ₹20,000 crore.

It challenged the levy and the Supreme Court in January 2012 ruled that the company was not liable to pay any tax over the acquisition of assets in India from Hutchison.