Shell To Contest India Income Tax Notice
NEW DELHI - Royal Dutch Shell PLC's India unit Monday said it would challenge a tax department notice which claims that it underpriced a sale of shares to an overseas group company by $2.7 billion.
"Recent media reports on tax evasion are baseless, and Shell India will challenge this order strongly and is evaluating all options for redress," the company said in a statement.
It didn't reveal how much it has been asked to pay in taxes.
The Mint newspaper reported Sunday that the Indian income tax department has charged Shell India of under-pricing the sale of 870 million shares by Shell India to Shell Gas BV in March 2009.
The shares were issued by Shell India at 10 rupees ($0.18) a share, but the income-tax authorities peg the deal at 183 rupees a share.
Shell, however, said "there are no provisions under the income tax law for such revaluation."
"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 (Indian) finance minister to attract further FDI into India," Yasmine Hilton, chairman of Shell Group of Companies in India, said in a statement.
Income tax authorities couldn't be reached for comment.
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