Supreme Court begins $2.5 bn Vodafone tax case hearing

The Supreme Court on Wednesday began hearing Vodafone's appeal challenging a USD 2.5 billion tax bill over its acquisition of mobile assets in the country, a case keenly watched by foreign investors in Asia's third-largest economy.

Vodafone, fighting the tax bill in India over its 2007 purchase of Hutchison Whampoa Ltd's Indian mobile business, had appealed to the Supreme Court challenging a lower court order that Indian tax authorities had jurisdiction over tax bills in cross-border deals. Indian tax authorities have said Vodafone's deal was liable to be taxed because most of the assets were based in India and under Indian law, buyers have to withhold capital gains tax liabilities and pay them to the government. Vodafone has earlier said Indian law did not require it to deduct tax and that capital gains tax is usually paid by the seller.