Shell wins Rs 18000 crore tax case
New Delhi: Dutch oil giant Royal Dutch Shell has won in a long legal battle against Indian tax authorities over a multi-million dollar tax dispute related to transfer pricing – the practice of setting the price for goods and services sold between related entities within an enterprise.
The Bombay High Court has passed the order in favour of Shell's Indian unit, which was accused of under-pricing shares transferred to its parent firm by $2.5 billion in February 2013.
The officials have asked the company to pay tax on the interest that the firm would have earned. But the court ruled that the stock transfers were not taxable.
Shell India welcomed the Bombay High Court's verdict.
"This is a positive outcome which should provide a further boost to the Indian government's initiatives to improve the country's investment climate," Shell's Indian unit said in a statement.
The ruling comes a little over a month after a division bench of the same court had ruled that telecom major Vodafone was not liable to pay an income tax of Rs 3,200 crore in another transfer pricing case.