DoT slaps another Rs1,263-cr tax notice on Vodafone

The tax department seems to be down on Vodafone India, the country's second-biggest mobile services operator, with a vengeance.

Reports today say the department of telecommunications (DoT), under the telecom ministry, has demanded a fresh penalty of Rs1,263 crore from the company for underreporting revenues during the financial years 2008-09 to 2010-11.

According to a PTI report citing unnamed official sources, the notice was issued today, asking Vodafone to pay up within 15 days. The DoT has found that adjusted revenue filed by company were ''not appropriate'', it adds.

According to another report in The Economic Times, DoT has sought Rs715 crore for 2008-09 and Rs548 crore for 2010-11. Again citing unnamed sources, the report says the notice was sent after DoT found procedural lapses and anomalies in Vodafone India's reporting of revenues, foreign exchange gains, taxation and interest during these years.

The move comes as a fresh blow to the company that is already contesting penalties, fines and one-time spectrum charges running into thousands of crores. It also seems to make a mockery of frequent claims by finance minister P Chidambaram that foreign companies operating in India would enjoy a stable tax regime.

Vodafone is struggling to settle Rs11,200 crore tax liability case with Indian government over tax on its acquisition of Hutchison's stake in Hutchison-Essar in 2007, but has not received any perceptible respite so far.

The company is also in dispute with DoT over its 3G intra-circle roaming agreement with Airtel and Idea Cellular.

The DoT has termed the agreement illegal and asked the company to terminate it. Vodafone along with its two biggest rivals, Bharti Airtel and Idea Cellular, have taken this government charge to the courts.