What is Tax Scam of Vodafone?

 Vodafone Tax Scandal

What is the first thing that you are reminded of whenever you read the name Vodafone? Is it the cute pug dog? It is the Zoozoo advertisements you see during IPL matches? Is it the last debate you had with your friend regarding the never-ending battle of Vodafone v/s Airtel? Well, the answer may be anything for you. But for the Indian government, it is surely the Vodafone tax scandal. It was a long controversy that kept going on and on. However, don’t worry about reading too much ahead. We have tried our best to make it pretty simple for your understanding and knowledge. Read ahead to know the details in the most interesting manner ever.

Magnifying Glass with Text SCAM Inside

When Vodafone The Scam Started

It all started off in 2007. Yeah, that’s long back. Actually, more than 10 years ago. That was the year when Vodafone International Holdings BV decided that they would venture into India. But, how would they do so? That is when your favorite pug marked Hutch came into the picture. This means that Vodafone International Holdings BV purchased Hutchison Essar. 
What followed next was hat the subsidiary transacted cash for shares with a similar holding company in the Cayman Islands.

Note that this happened beyond the boundaries of India and actually at quite some distant. So, it is very simple now for you to put two and two together and make four. The result was that the Indian tax authorities had nothing to say, do or claim because it was just out of their premises.

Vodafone Text on Wall

Supreme Court's Stand

Though the Supreme Court was fine with this deal, the Indian government was clearly not. This is actually obvious, isn’t it? All that the authorities and officials of the Indian government could see, understand and perceive was that there were losing out on huge revenue. This is when they thought that they cannot just sit still and will actually have to do something. Thus, came into existence the General Anti-Avoidance Rule. In short, it is referred to as GAAR.

Now, you must be wondering that what is this GAAR? It was actually a rule which specified that the government had the right to dig up the past. The reference was to past deals. Also, the extent was to as distant as 1962. 
Definitely, this did not go down too well with Vodafone and other companies as well. This why there was a great uproar on a national scale. Enterprises all over the subcontinent had something or the other to say.
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Implementation of GAAR

The implementation of GAAR was postponed till 2016. However, even then the tax seekers were not at peace. 
All they cared about was their way to make extra bucks and fill their pockets. That is anyway not shocking at all since there are so many scandals and corruption charges against a number of ministers and influential people of the nation. 
Last but not the least, this information is of relevance to the public because if you are an investor or planning to invest in a company, then you must be aware of their dues. 

Tags: Telecom Scam, Tax Scam, Vodafone, Corporate Scam, Vodafone International

See also:

Ponzi Scam

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