Tax­ing Times

Southasia - - BRIEFINGS -

The An­glo-Dutch oil company Shell won a multi-mil­lion dol­lar tax dis­pute against the In­dian tax au­thor­i­ties when the Bom­bay High Court gave a ver­dict in its fa­vor. The case was re­lated to trans­fer pric­ing – the value at which com­pa­nies trade prod­ucts, ser­vices or as­sets be­tween units across bor­ders, a reg­u­lar part of do­ing business for a multi­na­tional. Shell had chal­lenged the tax of­fice which al­leged in Fe­bru­ary last year


that the company's In­dian unit un­der­priced shares trans­ferred to the par­ent company by about $2.5 bil­lion de­mand­ing tax on the in­ter­est the company would have earned.

The court fa­vored Shell on the grounds that is­suance of shares by an In­dian company to its for­eign par­ent was not tax­able un­der the trans­fer pric­ing pro­vi­sions. Ear­lier, an In­dian court ruled in fa­vor of the Voda­fone Group, the big­gest for­eign cor­po­rate

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