Vodafone plans to pay $5.46 billion to the Essar Group for its one-third holding in Vodafone Essar. In a statement, the operator said, “The settlement marks the end of a four-year partnership between Vodafone and Essar in India, during which Vodafone Essar has grown to reach almost 140 million subscribers.?

The deal concludes a process which began when Vodafone purchased a 67 percent stake in Hutchison Essar Limited from Hong Kong-based Hutchison Whampoa for $11.1 billion in 2007.

Vodafone’s pact with Essar gave the Indian conglomerate the option to sell its stake in Vodafone Essar to the British firm for $5 billion. The figure of $5.46 billion to be paid to the Essar Group is higher than the $5 billion initially announced and is owing to tax on the transaction.

However, Vodafone has remained firm that it does not have to pay tax on the 2007 deal with Hutchison Whampoa. It argues that the deal was between two companies based outside India. Meanwhile, Indian authorities have countered that tax has to be paid on the transaction, as it involves an India-based asset.

The case is to be presented before the Supreme Court on July 19. The tax department has asked Vodafone to pay $2.6 billion in tax, apart from the same amount in penalties. Vodafone’s purchase of Essar’s stake pushes the British firm slightly above the 74 percent foreign companies are permitted to hold in Indian telecom firms.