Shell India says to challenge order by tax authorities

Last Updated: Mon, Feb 04, 2013 11:30 hrs

MUMBAI, Feb 4 (Reuters) - Anglo-Dutch oil major Royal Dutch Shell Plc on Monday said its Indian unit will challenge a transfer pricing order by Indian tax authorities relating to a transfer of shares to its parent and is evaluating all options for redressal.

The company said a 152.20 billion rupees ($2.7 billion) adjustment has been proposed in the transfer pricing order by the tax authorities on account of issue of equity shares by Shell India to its sole parent Shell Gas BV in March 2009.

Shell said 87 million shares had been issued at 10 rupees each, but the order by the tax authorities had valued these at 183 rupees per share.

"Taxing the money received by Shell India is in effect a tax on foreign direct investment (FDI), which is contrary not only to law but also to the spirit of the recent global trip by the Finance Minister," Shell's India Chairman Yasmine Hilton said in a statement.

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