The Central Board of Direct Taxes has suggested to the finance ministry that Hutchison Telecom International Ltd should first pay capital gains tax on the sale of its 52 per cent stake in Hutchison-Essar to Vodafone for $11.1 billion before the Foreign Investment Promotion Board clears the Vodafone acquisition.
Sources close to the developments said the tax authorities are of the view that the tax liability is on account of the capital gains arising from the sale of shares to Vodafone.
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