Published February 02, 2013 by Dow Jones Newswires
The Indian unit of Royal Dutch Shell PLC (RDSA) Saturday said it is in talks with tax authorities in India over alleged tax evasion.
Earlier in the day, Mint newspaper, citing a person familiar with the matter, said that the Indian income tax department charged Shell India of under pricing a share transfer within the group by 150 billion rupees ($2.8 billion) and consequently evading taxes.
Citing television channel ET Now, the report also said that the income-tax order relates to the issue of 870 million shares by Shell India to an overseas company Shell Gas BV in March 2009.
The shares were issued at 10 rupees a share, which the income-tax authorities contest and peg higher at 180 rupees a share instead.
“Shell India tax experts have indeed been in discussions with the Indian tax authorities on this issue over the past week and do not agree with their views,” a spokesman for the company said.
The spokesman said a tax officer has made an assessment of the situation and has passed an order. “We will review the order and initiate consequent appropriate actions.”
Officials at India’s finance ministry under whose purview the income tax department falls, could not be immediately reached for comment.
Transfer pricing is a relatively new field of study in the Indian tax regime. It refers to the practice of arm’s-length pricing of transactions among companies that are part of a group across different countries. The law seeks to ensure that fair prices are levied in cross-border transactions.
Write to Khushita Vasant at [email protected]
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