Foreign fund inflows up despite Vodafone tax issue: CBDT

The tax dispute with telecom major, Vodafone, has not impacted foreign fund inflows into the country which, on the contrary, has increased substantially, a top Income Tax official said.

By PTI | Oct 22, 2010, 01.31 PM IST

MUMBAI: The tax dispute with telecom major, Vodafone, has not impacted foreign fund inflows into the country which, on the contrary, has increased substantially, a top Income Tax official said.

"The issue (Vodafone tax liability) has not impacted foreign funds inflow," Central Board of Direct Taxes (CBDT) Chairman, S S N Moorthy, told reporters on the sidelines of an event here on Friday.

"Foreign funds inflows have increased in 2009-10 as compared to 2008-09," the official said.

Moorthy's assertion came in the wake of a section of India Inc voicing apprehensions that the huge tax liability raised against Vodafone could discourage multi-nationals from investing in India.

The Income Tax department has finalised its tax liability claim against Vodafone at around Rs 12,000 crore, he said.

"It (the tax liabilities) is around Rs 12,000-crore," the CBDT Chairman said in response to a query.

The Tax Department is likely to issue a fresh tax demand notice to Vodafone amounting to around Rs 12,000 crore today.

The Supreme Court had on September 27 issued notices to the tax authorities directing them to decide within four weeks the liabilities of Vodafone.

It had refused to offer any immediate relief to the company, which has challenged the Bombay High Court order allowing the Government to tax the company's USD 11-billion deal with Hutch.

The Vodafone case will come up in the Supreme Court on October 25.

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