Vodafone’s $2.5 Billion Indian Tax Bill Could Double To $5 Billion

Vodafone, which has to pay an Income Tax Bill of Rs. 12,297 Crore or around $2.5 billion, could now double in its amount. Vodafone’s CFO Andy Halford was quoted saying that Indian IT authorities could impose penalties for non payment to to tune of $2-2.5 billion.


Vodafone owes taxes related to its 2007, $10.9 billion acquisition of Hutchison Essar or Hutch, according to the IT authorities. In April, the┬áSupreme Court asked the country’s tax office to restrain from enforcing penalties on Vodafone until an order is passed after a case hearing in July, but allowed it to continue with its proceedings.

Vodafone can take consolation that it is not the only service provider to face problems in the Indian Telecom Industry. Fierce competition and a large number of players have made it a difficult market to crack.

Doubling of the tax payable to $5bn can have a huge impact on the balance sheet, but being one of the largest service providers in India and the world, the company should be able to absorb it.

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