I-T claims absurd, we don’t evade tax: Shell
Yasmine Hilton, chairman, Shell India, on Tuesday termed the tax demand “absurd”. “Shell does not evade taxes. I cannot have our reputation tarnished that way. We will consult various parties in the matter,” Hilton told reporters.
According to the tax department, the value of 8.7 crore shares issued by Shell India to Shell Gas BV at R10 a piece in 2009 should have been higher by R15,220 crore (R183 a share) on which income tax was liable to be paid. Shell said the tax department’s move is bad in law as the transaction was a capital receipt on which income tax cannot be levied.
India has been aggressively enforcing its transfer pricing rules meant to prevent attribution of taxable income of multinational companies to other jurisdictions where the rate of tax may be low. If the authorities in other countries where the company has presence do not honour the Indian tax department’s decision, the income gets taxed twice. The Revenue Department in its 2011-12 audit has claimed income suppression of R44,532 crore ($8 billion) pertaining to transfer pricing, up 85% over the comparable figure in the previous year’s audit. Companies have been asked to pay nearly a third of this amount called ‘transfer pricing adjustment’ as tax.
Shell’s tax experts are in
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