New Delhi: The Income Tax Department has slapped a Rs. 32,320 crore demand in tax, interest and penalty on Hong Kong-based Hutchison for alleged capital gains it made on the $11 billion sale of its mobile business in India to UK’s Vodafone Group in 2007.
In a filing to the Hong Kong stock exchange, billionaire Li Ka-shing’s CK Hutchison Holdings Ltd said its unit, Hutchison Telecommunications International Ltd (HTIL) has been served with a tax demand of about Rs. 7,900 crore, Rs. 16,430 crore of interest and another Rs. 7,900 crore in penalty.
The CK Hutchison unit continues to dispute the validity of those taxes, it said.This is the first time a tax demand on the Hong Kong firm is being raised. So far, the Indian government had been pursuing the tax from Vodafone.Vodafone was initially slapped with Rs. 7,990 crore tax demand for withholding tax from payments it made to Hutchison. The outstanding after including interest andpenalty runs over Rs. 20,000 crore.