Shell India today described as “absurd” a $1-billion tax demand on what it said was a $160-million equity infusion done by its parent company four years earlier. Shell India head Yasmine Hilton said the equity infusion was needed to sustain its downstream operations in the country.
“We have (now) received a tax request of $1 bn on this equity injection of $160 mn. Somebody needs to explain (this) because I do not understand,” she said. The income tax (I-T) department has charged Shell India with undervaluing share transfer within the group by Rs 15,220 crore, and, thus, evading tax. The order relates to the issue of 87 million shares by Shell India to an arm abroad, Shell Gas BV, in March 2009. The shares were issued at Rs 10 each; the tax authorities value this at Rs 183 each.
“We never comment in public about our tax affairs. The only reasons, and absolutely the only reasons, we commented on the issue was because it was reported that Shell was evading taxes. I cannot have our reputation tarnished that way. Shell does not evade taxes. At Shell, we have the highest business principles,” Hilton told reporters today.
To attract global giants, she said, “India needs to have a robust investor-friendly framework and a stable fiscal, legal and tax regime. “Do not create waves of fear among your investors by unreasonable tax demands or unreasonable statements,” Hilton warned. Shell has a regasification terminal at Hazira in Gujarat and has set up 70 fuel retail outlets. It is looking for material opportunities in the upstream sector, too. It also has plans to expand the Hazira facility to five million tonnes by the end of the quarter. On the east coast, it has tied with the Anil Dhirubhai Ambani group to set up a floating regasification facility at the Kakinada port.
Excessive, unacceptable: Nokia
Protesting the survey by the I-T department at its Chennai premises last month, Nokia said the actions of authorities were excessive, unacceptable and "ran counter" to Indian and global standards. On January 8, officials had conducted a survey operation on the premises of the Finnish cellphone major in Chennai on charges of alleged tax evasion. The company said it had not got official information on the potential tax claims, and had only seen "wildly varying claims" from anonymous officials in the media.