The Department of Income Tax has reportedly issued a draft transfer pricing order to Vodafone, adding nearly Rs 85 billion to its income from its Indian operations.
Indian companies pay 30 per cent tax on their income and a 3 per cent surcharge.
A transfer price refers to the actual price at which a transaction takes place between two related parties, usually belonging to the same group.
Further, it is believed that Vodafone plans to review the order in detail and respond appropriately in due course.
The operator said that any potential tax liability related to this proposed transfer pricing adjustment has not been established.
