Shell India to challenge order by tax authorities
Shell India said on Monday that as part of its investment in the country Shell India Markets Pvt Ltd issued 87 million shares to parent Shell Gas at Rs 10 apiece in 2009.
Tax authorities have valued those at Rs 183, proposing an adjustment in the value of the deal of Rs 152 billion, Shell said. The company said the transfer pricing order by the tax authorities was based on an “incorrect interpretation” of tax rules and was “bad in law” as the amount is a capital receipt on which income tax cannot be levied.
“Taxing the money received by Shell India is, in effect, a tax on foreign direct investment, which is contrary not only to law but also to the spirit of the recent global trip by the finance minister,” Shell India chairman Yasmine Hilton said.
News of the tax dispute with Shell came ahead of a visit to India later this month by British Prime Minister David Cameron. An Indian foreign office spokesman confirmed the trip on Monday.
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