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Vodafone India begins legal proceedings against Department of Telecoms

Vodafone India has launched a legal appeal against a decision by the country’s Department of Telecommunications after it denied the operator’s request to extend its licences in Delhi, Kolkata and Mumbai.

In April, Vodafone unequivocally stated to the DoT that it had no legal basis for rejecting its application to extend its licences. Due to the continued silence from the DoT, Vodafone has now resorted to legal action.

The terms of the 20-year licences state that the government is able to extend them for ten years if requested to do so by the holder when the licence is in its penultimate year of validity. Vodafone’s licences, which cover the 900MHz and 1800MHz bands, expire in November 2014.

Terms and conditions of renewal should theoretically be proposed by the DoT. However, despite repeated requests from Vodafone, the Department failed to do so, with Vodafone concluding that the DoT had “arbitrarily rejected Vodafone’s applications for extension without due consideration of the substantive points raised.”

The legal case joins an ongoing $2.6 billion tax dispute between Vodafone and the Indian government which has been stalled by numerous external factors. The upcoming 2014 election is likely to delay any progress on the case for another year. Vodafone has stated that it is “in discussions with the Indian government and...hope[s] to be able to reach an amicable solution.”

However, some observers are doubtful that this will be the case. Arun Giri, the head of Indian tax information service Taxsutra, has claimed that “there will be no settlement, it isn’t remotely heading in that direction. There is huge resistance from the income tax department to letting Vodafone get off.”

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