On Friday, the Chairman of Central Board of Direct Taxes (CBDT), Prakash Chandra, notified that Euro Pacific Security Ltd, subsidiary of Vodafone, has reserved its application from Authority of Advance Ruling where it had disputed the withholding tax demand invoking immunity, under the Double Taxation Avoidance Agreement with Mauritius.

The Euro Pacific Security Ltd. has bought 22% stake held by Essar's Mauritius arm in the Vodafone Essar. In addition, Mr. Prakash Chandra has confirmed the approximate tax liability of Rs 3,500 to Rs 3,700 crore

The Company is expected to disburse withholding tax of up to Rs 3,700 crore, during the current financial year on its $3.8 billion deal involving the purchase of shares from Mauritius-based Essar Ltd. and Essar Communication Ltd.

''We were one of the early entrants in the telecom space in 1995 and we are really pleased that Vodafone Essar has grown to become one of the premier telecom companies in the country with over 140 million subscribers. We have also enjoyed an extremely successful relationship with Vodafone and we wish them all success in the future”, said the Chairman of Essar Group, Shashi Ruia, in a press release.

The UK based company, Vodafone, credits to be a world’s largest telecom operator by revenue.