Vodafone sees growth in India; says resolution of tax dispute may be delayed
20 May 2015
British telecom giant Vodafone Plc today reported a substantial rise in its India revenues even as it said a decision on the long-pending Rs20,000-crore tax dispute with the Indian government will be further delayed because of a change of arbitrators.
Vodafone India today reported a 12.6-per cent year-on-year increase in its revenue, at Rs42,526 crore, for the financial year ended 31 March 2015, on the back of customer additions and robust data growth.
The company had reported a total revenue of Rs37,777 crore in the 2013-14 fiscal with EBITDA or operating profit at Rs12,605 crore, up from Rs10,847 crore, in the same period in the previous year.
Its customer base stands at around 184 million and the average revenue per user at Rs200 in the fourth quarter of 2014-15. The company made a capital expenditure of Rs8,598 crore. The net debt for the company stands at Rs47,807 crore as of March 2015.
Vodafone said the arbitration process is being delayed as two of the three-member arbitration panel have quit.
"There is now likely to be a delay in appointing the chairman pending the Indian government appointing a replacement for its party-appointed arbitrator," Vodafone said in a statement.
"The Indian government appointed an arbitrator but he resigned in May 2015.
The third arbitrator, who will act as chairman of the tribunal, had been agreed to by the two party-appointed arbitrators (prior to the government's arbitrator's resignation) but declined to accept the appointment.
"There is now likely to be a delay in appointing the chairman pending the Indian government appointing a replacement for its party-appointed arbitrator," Vodafone said in a statement.
While government's arbitrator, former chief justice of India RC Lahoti recused himself, neutral judge Abdulqawi Ahmed Yusuf of the International Court of Justice declined to be part of the three-member panel.
Vodafone nominee Yves Fortier of Canada, however, continues to be on the panel.
The company further said that if there is no subsequent agreement on the appointment of the chairman, the International Court of Justice will appoint the third arbitrator.
The dispute is over tax liability arising out of Vodafone's 2007 purchase of Hutchison Whampoa Ltd's Indian assets.
The previous UPA government had, in 2013, extended a conciliation offer to Vodfone but withdrew it in May 2014 following an international arbitration notice by Vodafone.
While the basic tax demand, the capital gains tax dispute was Rs7,990 crore, the total outstanding, including interest and penalty, is estimated to have risen to Rs20,000 crore.
The Supreme Court had ruled in Vodafone's favour in 2012, saying the company was not liable to pay any tax over the acquisition of assets in India from Hong Kong-based Hutchison.
The government, however, amended the tax laws with retrospective effect to undo the Supreme Court judgement, and claimed taxes.
