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India Budget: Nightmare for Vodafone?
Into a budget generally described as "balanced" or "modest" (not the most ringing endorsement but more on that later) the Indian government seems to have slipped one bombshell: retrospective taxation of overseas transactions which involve assets primarily in India. Taxand India comments on the India budget with a look at the recent Vodafone case.
At the very least, Vodafone now faces another legal battle. It may win, says Shefali Goradia, partner at Taxand India: "It's not very clear if the government can overturn the Supreme Court's finding."
But the change could have much wider implications: "If there is a company which is listed on the London Stock Exchange but the majority of its assets are in India, then anyone who sells the shares of the company in London would still have to pay Indian tax," she said.
First published in the FT Online 16 March 2012