Key facts: Nokia, Vodafone grab eyeballs with tax challenges, but India targetting more

Apr 30 2014, 12:27 IST
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Vodafone International is involves in Rs 20,000 crore tax dispute in India. Vodafone International is involves in Rs 20,000 crore tax dispute in India.
SummaryNokia, Vodafone tax claims are on front burner, but do check out the others.

India is aggressively pursuing tax claims against multinational firms like Nokia and Vodafone operating in the country as the government looks to rein in its budget deficit, taking particular aim at IT and back-office functions. But, while Nokia and Vodafone have got much media coverage, India has targeted several other MNCs in for tax audits on transfer-pricing.

Here are the top companies involving tax disputes in the country:

Company: Vodafone International

Tax claims (Rs crore):20,000

Nature of claim:Capital gains tax on indirect transfer of Indian assets

Transaction:Hutch Essar purchase in 2007 from CGP investments for $ 11 billion

Company: Nokia*

Tax claims (Rs crore):21,153

Nature of claim:On royalty paid to the parent

Transaction:Royalty to Finnish parent for 7 years from 2006-07

Company: IBM

Tax claims (Rs crore):11,000

Nature of claim:Tax sops disputed

Transaction:Software export sops claimed for FY07

Company: Shell India

Tax claims (Rs crore):4,566**

Nature of claim:On Rs 15,220 crore TP# adjustments on share valuation

Transaction:Issue of 8.7 crore shares at face value of Rs 10 apiece to Shell Gas BV in FY09

Company: Cairn Energy

Tax claims (Rs crore):Yet to be estimated

Nature of claim:On Rs 24,500 crore of capital

Transaction:Cairn Energys transfer of Indian assets gain/business income from Jersey entity to Cairn India in 2006

Company: Vodafone India

Tax claims (Rs crore):4,200*

Nature of claim:TP adjustment

Transaction:TP adjustments of R8,500 crore for FY08 on sale of call centre business in India to Hutchison Whampoa

* includes interest and penalty;

#transfer pricing;

** Assessment of income from the TP adjustment yet to be computed.

Table: Details of MNCs with tax claims of under Rs 3,000 crore

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