Shell's India unit in tax dispute with authorities

Last Updated: Sun, Feb 03, 2013 15:00 hrs

Feb 3 (Reuters) - Anglo-Dutch oil major Royal Dutch Shell Plc said its Indian unit has been in talks with local authorities over a tax dispute, making it the latest global company to have a run-in with tax officials in the country.

India's Mint newspaper, citing a person familiar with the matter, reported on Saturday tax authorities accused Shell's Indian unit of underpricing a transfer of shares to a related overseas company by about $2.8 billion and thereby evading taxes.

Television channel ET Now carried a similar report last Thursday.

"Shell India tax experts have indeed been in discussions with the Indian tax authorities on this issue over the past week and do not agree with their views," a Shell spokesman said in a statement emailed in reply to a query from Reuters on the report in Mint.

"The tax officer has now made an assessment and passed an order which we have not yet received. We will review the order and initiate consequent appropriate actions," the spokesman said in an email late on Saturday to Reuters.

The response did not address all of the details raised in reports by Mint and ET Now.

Indian tax officials were not available for comment. Several calls to a spokeswoman of the tax department in Mumbai went unanswered.

The Shell India case comes amid uncertainty about the outcome of a more-than $2 billion tax dispute between Vodafone Group Plc and India's tax office that has dented corporate investor confidence in the country.

Vodafone, the largest corporate investor in India, has repeatedly clashed with Indian authorities over taxes since it bought Hutchison Whampoa's local mobile business in 2007. While India's Supreme Court backed Vodafone's position that it does not owe tax on the deal, a subsequent law change enabled India to impose tax on mergers retrospectively.

Indian officials and Vodafone have held recent talks on the dispute.

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