Shell approaches court against India Tax demand
BY ASHUTOSH JOSHI
MUMBAI -- The Indian unit of Royal Dutch Shell said Thursday it has challenged an order from Indian authorities to pay more tax than it had paid over a transfer of its shares to a foreign subsidiary of its parent.
Indian authorities had claimed that when a Netherlands unit of the oil company pumped money into Shell' s India arm in 2009, the share transfer should have been at $3.38 a share, instead of $0.18. Shell said that it valued the deal properly and that it didn' t owe any extra tax.
On Thursday, the company said it filed a petition in the Bombay High Court challenging the tax demand. Shell has always maintained that it will continue to evaluate all options for redress available to resolve this tax dispute, it said in a statement.
It wasn' t immediately clear how much tax did the company pay against the deal and what additional tax demand Indian authorities have made. Officials at India' s income tax department couldn' t be immediately reached for a comment.
Shell could face an additional tax liability of about $1 billion, a consultant who is advising Shell on the matter had told The Wall Street Journal in February.
Multinational companies frequently buy shares of overseas units as a way to inject cash into the overseas units.
Shell is among several foreign companies from which Indian authorities are seeking billions of dollars in extra taxes, saying that they haven' t properly valued transactions with their Indian subsidiaries.
Dow Jones Newswires