Shell India, the Indian arm of Royal Dutch Shell, said on Tuesday it would challenge a notice by the Income Tax (I-T) authorities alleging tax evasion by under-pricing a share transfer between member firms, stating the order was based on incorrect interpretation of regulations.
I-T authorities have charged Shell India of under-pricing a share transfer in the group by Rs. 15,220 crore, thus evading taxes. The order relates to issue of 87 million shares by Shell India to overseas firm Shell Gas BV in March 2009. The shares were issued at R10/share, which I-T authorities contest and peg at R183/share.
"Tax evasion (reports) are baseless and Shell India will challenge this order strongly and is evaluating all options for redress," said Royal Dutch Shell Plc's India unit head Yasmine Hilton. "Shell globally and in India complies with all applicable local regulations and laws and has also done so in this instance, in full compliance with the Shell Group business principles," she said.
"Funding of a subsidiary via issue of shares is common in India and globally," Shell India said.