VODAFONE INDIA’S MINORITY STAKE SELLERS ARE LIABLE TO PAY CAPITAL GAINS TAX @ 20 PER CENT TO THE CENTRAL GOVERNMENT,A FINANCE MINISTRY OFFICIAL HAS SAID.

THE BRITISH MAJOR TELCO,VODAFONE PLC’S PLAN TO BUY OUT THE MINORITY SHAREHOLDERS IN ITS INDIAN TELECOM VENTURE,VODAFONE INDIA TO INCREASE ITS STAKE TO 100 PER CENT FROM THE PRESENT 84.5 PER CENT WILL BE TAXED AS PER RULES.

VODAFONE CAME TO INDIA IN 2007 BY BUYING HUTCHISON WHAMPOA IN HUTCHISON-ESSAR IN A $11 BILLION DEAL FOR WHICH THE COMPANY FACES A TAX LIABILITY OF RS.11200 CRORE,ALONG WITH INTEREST.

THIS WAS DISPUTED BY THE COMPANY AND THE GOVERNMENT HAD TO SOFTEN ITS STAND AGREEING FOR

CONCILIATION OFFERED BY VODAFONE.BUT THE ISSUE IS STILL PENDING UNSETTLED AS THE COMPANY

IS INSISTING TO RESOLVE THE DISPUTE UNDER UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW INSTEAD OF INDIAN ARBITRATION AND CONCILIATION ACT.

IN THESE CIRCUMSTANCES IT IS TO BE SEEN WHETHER THE GOVERNMENT WILL LEVY THE CAPITAL GAINS TAX AS PROPOSED IN THE MINORITY STAKE SELLING.