India says 27 firms underpaid tax in share transfers in last fiscal year

Fri Apr 26, 2013 10:15pm IST

1 of 2. An exterior view of the Standard Chartered headquarters is seen in London August 7, 2012.

Credit: Reuters/Olivia Harris/Files

Related Topics

Stocks

   

REUTERS - India said 27 companies, including the local units of HSBC (HSBA.L), Standard Chartered (STAN.L) and Vodafone (VOD.L), 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 pricing issues.

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 (RDSa.L), 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.

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 (BRTI.NS) and some units of the diversified Essar conglomerate, including Essar Power and Essar Investments, were also named by the minister in his statement.

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 Hardcastle)

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
People walk in the Wipro campus in Bangalore June 23, 2009. REUTERS/Punit Paranjpe/Files

Wipro Q4 net profit beats estimates, rises 29 percent

Wipro posted a 29 percent rise in its fourth-quarter net profit, beating expectations, helped by increased IT spending by its customers. For the quarter ended March 31, the company said it earned 22.27 billion rupees compared with 17.29 billion rupees a year earlier.  Full Article | Full Coverage 

REUTERS SHOWCASE

Literary Giant Dies

Literary Giant Dies

Nobel winner Garcia Marquez, master of magical realism, dies at 87.  Read 

Election 2014

Election 2014

India holds biggest day of voting with BJP gaining strength  Full Article | Full Coverage 

Insider Trading

Insider Trading

Ex-Goldman director Gupta starts prison term on June 17.  Full Article 

Market Eye

Market Eye

Sensex jumps 351 points, snaps 3-day losing streak  Full Article 

Expansion Plans

Expansion Plans

Reliance Industries, HPCL Mittal plan refinery expansions.  Full Article 

S&P on India

S&P on India

S&P: India's ratings to depend on next govt econ, fiscal policies.  Full Article 

Ambitious Aim

Ambitious Aim

In green car race, Toyota adds muscle with fuel-cell launch.  Full Article 

Deal Talk

Deal Talk

Piramal to buy 20 percent stake in Shriram Capital for $334 million.  Full Article 

Bond Market

Bond Market

A star abroad, RBI boss riles bond traders at home  Full Article 

Reuters India Mobile

Reuters India Mobile

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