MNCs Facing Tax Notices; Investors in Trouble

Vodafone and Shell India are all prepared to question the decision of the tax department. Nokia also called this decision as a contradicting one and is not ready to welcome it.

Shell India Chairman Yasmine Hilton has said, "Shell India's considered view is that the transfer pricing order is based on an incorrect interpretation of the Indian tax regulations and is bad in law as this is a capital receipt on which income tax cannot be levied. Funding of a subsidiary through issue of shares is common in India and globally."

"Taxing the money received by Shell India is in effect a tax on Foreign Direct Investment (FDI), which is contrary not only to law but also to the spirit of the recent global trip by the finance minister to attract further FDI into India," added Hilton.

There has been a gap of insufficiency in the revenue collection and this is the reason of the slow economic growth in the nation. The tax department is fighting hard to hit the bull’s eye.

The slow growth in the economy is forcing the tax department to impose

Slowing economic growth has put pressure on revenues and authorities are struggling to keep the fiscal deficit within the targeted 5.3 percent of gross domestic product. Revenue officials are under pressure to meet the tax targets set for the year.

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