Vodafone has been asked to pay a sum of Rs 11,218 crore in taxes within a month in relation to its acquisition of Hutchison’s stake in the telecom joint venture in India in 2007.

According to an official statement, the Income Tax department has issued an order raising a tax demand of Rs 11,218 crore on Vodafone International holdings BV treating it as an assessee in default.

From Timesofindia.indiatimes.com:

Vodafone had bought majority stake owned by Hutchison in the Hutchison-Essar joint venture offering mobile services in India.

Vodafone Essar, however, contested the tax notice. “Vodafone strongly disagrees with the tax calculation released by the Indian Tax office to the media today,” the company’s spokesperson said in a statement.

“Vodafone continues to believe that it is not liable for any tax on this transaction involving the transfer of a company outside of India. Further, Vodafone was the acquirer and not the vendor and has made no gain on the transaction,” the spokesperson said.

The case relates to a deal in 2007 when Vodafone, through its group firm Vodafone International Holdings, bought Hutchison Telecommunications India’s (HTIL) 67 per cent stake in Hutchison Essar for over USD 11 billion.

“The tax demand has been raised in pursuance to the direction of the Supreme Court of India dated September 27 to the income tax assessing officer to determine and quantify the tax liability of Vodafone within four weeks,” the official statement said.

The tax notice was issued after a directive by the Supreme Court on September 27 to the I-T assessing officer for determining and quantifying the tax liability of Vodafone within a period of four weeks.