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MUMBAI, Nov 26 (Reuters) - India's attorney general hasrecommended the government refrain from appealing a regionalcourt ruling in favour of Vodafone Group Plc in along-running tax dispute, a person directly involved in thematter said.
Vodafone, the biggest foreign corporate investor in India,has been involved in a series of tax disputes since it enteredthe country seven years ago, aiming to tap the world'ssecond-biggest mobile phone market by customer numbers.
In this case, India's tax office accused Vodafone IndiaServices Private Ltd, a unit of the British group, ofunder-pricing shares in a rights issue to its parent company anddemanded tax of about 30 billion rupees ($486 million).
The Bombay High Court last month ruled in favour ofVodafone. The tax department then sought the opinion of theattorney general on whether the order should be challenged atthe Supreme Court, according to local media reports.
The government will take a final decision on whether toappeal, the person said, declining to be named due to thesensitivity of the issue.
A finance ministry spokesman said he could not immediatelycomment on the development.
Many tax experts expect the government, led by PrimeMinister Narendra Modi, to hold off from appealing the courtruling, as such a move could boost foreign investor sentimentneeded to help revive an economy after two years of annualgrowth below 5 percent.
Vodafone is separately contesting a more than $2 billion taxdemand over its acquisition of Indian mobile operations in 2007from Hutchison Whampoa.
($1 = 61.7900 Indian rupee) (Reporting by Devidutta Tripathy and Sumeet Chatterjee; editingby Jane Baird)
