April 26 (Reuters) - India said 27 companies, including the
local units of HSBC, Standard Chartered and
Vodafone, underpaid taxes in the last fiscal year after
they sold shares to their overseas arms too cheaply.
Finance Minister P. Chidambaram named the companies in a
written reply on Friday to a lawmaker's question about which
companies were in conflict with the tax department over transfer
Transfer pricing, or the value at which companies trade
products, services, shares or assets between units across
borders, is a regular part of doing business for a multinational
company and influences tax liabilities.
The issue has been high on the political agenda in India and
the country has stepped-up enforcement of tax collections and
actions against global companies as it aims to make up for a
revenue shortfall and head off a credit rating downgrade.
India's tax department also made "transfer pricing
adjustments" involving the local unit of Royal Dutch Shell
, the finance minister said.
Shell's India arm filed a petition in the Bombay High Court
on Wednesday challenging the claims by the local tax authorities
that a share sale to its overseas parent in 2009 was undervalued
by about 152 billion rupees ($2.8 billion).
British-based mobile phone giant Vodafone said in February
it had received a fresh transfer pricing order in India over the
issue of shares by a unit, adding to its tax woes in the country
. It has said it would challenge the order.
A Vodafone spokesman in London did not immediately respond
to a request for comment on Friday.
Mumbai-based spokesmen for HSBC and Standard Chartered
declined to comment.
India's top mobile operator Bharti Airtel and some
units of the diversified Essar conglomerate, including Essar
Power and Essar Investments, were also named by the minister in
Essar group declined to comment and Bharti Airtel did not
have an immediate comment.
India has targeted several multinational companies in recent
years for tax audits on transfer-pricing, but over the past 12
months has widened the scope of the investigations, tax
officials have said.
(Reporting by Sumeet Chatterjee in MUMBAI; Editing by Elaine