Idea hit by USD711m charge

8 Apr 2013

India’s tax office has issued a demand for INR39 billion (USD710.8 million) in relation to a transaction in 2009, the Economic Times reports. Aditya Birla Telecom Ltd (ABTL), and its parent company Idea Cellular were hit with charges of INR24 billion and INR15 billion respectively, for the 2009 demerger which saw ABTL transfer its telecoms licence for the Bihar circle, along with other assets, to Idea Cellular. The demand is understood to be the first attempt to levy charges on corporate demergers under the General Anti-Avoidance Rules (GAAR) implemented last year. Idea maintained that the tax order is ‘inconsistent with established tax laws and past precedents,’ adding that: ‘The company believes the demands are unjustified and based on erroneous interpretation of the current tax laws and the facts of the case.’

India, Vodafone Idea (previously Idea Cellular)