Shell India denied charges leveled by the union government against the company on tax evasion and said it is evaluating all options to challenge the recent order of the government.
Recently, the central tax authorities issued a notice to the firm claiming Rs $2.7 bn on alleged mispricing of share sale transaction with its parent firm in 2009.
The disagreement relates to a procedure known as transfer pricing, meaning the rules by which a multinational company operating in India accounts for transfers of funds between itself and its parent company.
Shell Gas BV, the parent firm of Shell India, received shares from the latter in 2009 at a price of Rs 10 per share for a total investment of $160 mn.
Shell India issued the share to finance investments in India, where the company operates a range of businesses from petrol stations to liquefied natural gas facilities. The company says it used an independent company to value the equity.
But according to the Indian tax department, the company ought to have valued the shares at Rs 183 per share, allowing it to reach the $2.7 bn adjustment figure, which Shell disputes.
Leave a Reply
You must be logged in to post a comment.