Dec 19 (Reuters) - Vodafone Group Plc has received afinal tax demand of about $604 million from Indian authorities,adding to its tax disputes in the country since it boughtHutchison Whampoa's mobile business there in 2007.
The British mobile operator would appeal the order soon, itsaid in a statement on Thursday.
Last year, Vodafone filed a petition in a local court in aso-called transfer pricing dispute after authorities sought toadd 85 billion rupees ($1.4 billion) to the taxable income of aunit, Vodafone India Services Pvt Ltd, which provided callcentre services to some group companies.
In September this year, the Bombay High Court extended astay on a final tax demand order by the authorities.
Transfer pricing is the value at which companies tradeproducts, services or assets between units. Indian rules requireall cross-border transactions between group companies to bevalued at arm's length - or at the same value as if thetransaction was with an un-related company.
"Vodafone maintains that there is no tax payable on thistransaction and the company will file an appeal before the taxappeal tribunal as soon as possible," the company said.
"Vodafone will continue to strongly defend its positionagainst this order."
Vodafone, the largest corporate investor in India, hasrepeatedly clashed with the authorities over taxes since itbought Hutchison's mobile business and was held liable for thecapital gains tax which the authorities say is owed on the deal.
This transfer pricing dispute is separate from the more than$2 billion tax demand on that deal.
Vodafone (VOD)