UK's Cameron may fly in to Shell India tax row

LONDON Fri Feb 15, 2013 8:51pm IST

Britain's Prime Minister David Cameron prepares to address an audience at the headquarters of the B&Q home improvement store in Eastleigh, southern England February 14, 2013. REUTERS/Ben Gurr/Pool

Britain's Prime Minister David Cameron prepares to address an audience at the headquarters of the B&Q home improvement store in Eastleigh, southern England February 14, 2013.

Credit: Reuters/Ben Gurr/Pool

Related Topics

Stocks

   

LONDON (Reuters) - Oil company Royal Dutch/Shell has asked the British government to raise the subject of a tax dispute with India during Prime Minister David Cameron's visit there next week, according to a source familiar with the request.

The dispute blew up earlier this month when tax authorities revalued by $2.7 billion a 2009 transaction by Shell with a wholly-owned subsidiary, and claimed a tax payment was due.

It comes as India seeks to balance its need to shore up its finances by raising tax receipts with its desire to encourage foreign investment.

The Anglo-Dutch oil group's run-in with tax officials follows a long-running $2 billion Indian tax claim on British mobile telecoms group Vodafone which has dented foreign investor confidence in the country.

Finnish phone maker Nokia earlier this week became the latest international company to protest against an Indian tax investigation.

The amount claimed from Shell was not specified, and an Indian tax official told Reuters it would be confined to interest on that amount.

Shell has responded vigorously to the tax claim, which was revealed initially in press reports.

"Taxing the money received by Shell India is, in effect, a tax on foreign direct investment, which is contrary not only to law but also to the spirit of the recent global trip by the finance minister," Shell India Chairman Yasmine Hilton said on February 4.

Shell's Indian presence goes back 80 years and, like other big oil companies, it has its eye on the country's growing market for natural gas and fuels.

Shell also has bitumen and lubricant operations in India and is the only one of the big-name international oil companies with a fuel retail licence in the country. It employs over 1,600 people at a business services centre in Chennai.

The source, who spoke on condition of anonymity, said Shell had not been invited to join a business delegation that will accompany Cameron on the trip, but hoped he would raise the issue on their behalf.

A spokeswoman for Cameron declined to discuss issues he was likely to raise, and would not say which companies were accompanying him. A Shell spokesman also declined to comment.

(Editing by Jeremy Gaunt.)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

School Shooting

School Shooting

Two killed, four wounded in Washington state school shooting.  Full Article 

Sundar Pichai Elevated

Sundar Pichai Elevated

Google's Pichai to oversee major products and services.  Full Article 

Need For Reforms

Need For Reforms

Euro zone risks "relapse into recession" without structural reforms - Draghi.  Full Article 

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Wal-Mart India

Wal-Mart India

Murali Lanka appointed as Wal-Mart India operations chief  Full Article 

Health Of Lenders

Health Of Lenders

25 European banks set to fail health checks - sources.  Full Article 

Special Report

Special Report

Why Madrid's poor fear Goldman Sachs and Blackstone  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage