Vodafone finally has a reason to cheer. We had earlier reported on how they didn’t seem to be making much money on their venture into India. This was primarily due to high 3G costs and a messy legal tangle with the Indian Government. According to the Indian Income Tax Department, they owed them Rs. 11,000 Crores in Taxes. They claimed it was due to them for Vodafone’s takeover of Hutchison Essar.
The case dragged on, with Vodafone denying they owed the amount to the IT department. The case moved up to the Supreme Court, who just passed their verdict in favour of Vodafone. According to the SC, Offshore deals are out of the Government’s Tax Jurisdiction. The Government was ordered to pay back the already collected Rs. 2500 Crore fine, along with 4% Interest.
The decision was being closely followed by a lot of parties, as it will have a lot of implications. It will boost the confidence of Foreign Investors with respect to investing in India, as they know they can’t be made liable to pay for offshore deals.
With companies like Amazon getting ready to enter the Indian market soon, others too may consider it with renewed seriousness.
What do you think of the SC’s verdict? Will Vodafone India reinvest the freed up Capital into the Indian Market to provide better services to their users? Do let us know in the comments below.