Shell India has filed a petition against Assistant Commissioner of Income-Tax in the Bombay High Court on allegations of tax evasion through a transfer pricing mechanism. The case will come up for hearing on May 3. The Indian arm of Royal Dutch Shell Plc has been accused by the Income-Tax Department of undervaluing a share sale within the group by Rs 15,000 crore in 2009 thus evading income-tax, as per The Hindu. In a statement issued on Thursday, the company said that, “Shell has always maintained that it will continue to evaluate all options for redress available to resolve this tax dispute.”
“Recent media reports on tax evasion are baseless and Shell India will challenge this order strongly and is evaluating all options for redress. Shell globally and in India complies with all applicable local regulations and laws and has also done so in this instance — in full compliance with the Shell Group Business Principles,” said Yasmine Hilton, Chairman, Shell Group of Companies in India. Shell India’s considered view is that the transfer pricing order is based on an incorrect interpretation of the Indian tax regulations and is bad in law as this is a capital receipt on which income tax cannot be levied. Funding of a subsidiary through issue of shares is common in India and globally. “Taxing the money received by Shell India is in effect a tax on Foreign Direct Investment (FDI), which is contrary not only to law but also to the spirit of the recent global trip by the Finance Minister to attract further FDI into India,” Hilton added.
26-Apr-13 
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