UK- based telecom giant Vodafone, which is fighting a Rs 11,000-crore capital gains tax case in the Supreme Court, could soon face a fresh tax burden in India. The income-tax department has issued a draft transfer pricing order to Vodafone, adding nearly Rs 8,500 crore to its income from Indian operations. Sources told ET NOW that it is difficult to establish the potential tax liability on this additional income at this point in time, because the I-T is yet to issue a final order. Indian companies pay 30% tax on their income and a 3% surcharge. Transfer price refers to the actual price at which a transaction takes place between two related parties, usually belonging to the same group. Multinational and transnational firms use transfer pricing to allocate revenue between different divisions.
Source: Economic Times
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