The largest oil company Royal Dutch Shell has managed to win tax court battle against the Government of India. The price paid is several billion dollars.
After a long term litigation, the main court of the state finally issued verdict in favour of the local branch of the famous corporation Shell. The company was accused of very substantial underestimation of shares which were sent last year to the mother firm of total amount of $2.5 billion.
Current politicians of India hoped that the company would pay tax on the interest profit received by the Corporation Shell. However, the final decision of the state court shows that stock transfers are not subjected to tax levies.
The lawyer of corporation Shell Myuksh Büschi said that the tax department too much exceeded its own competence and in fact practiced only the panel game. This failure of the authorities can be called as a very significant victory for the oil company, as well as for many other international firms which have tax disputes with the Indian authorities.
Due to the fact that the Government of India recently began to propose too often all kinds of tax claims to international organizations, such as IBM, Nokia Oyi, HSBC, AT&T, and many others, the country’s reputation as a favorable region for foreign investment has suffered seriously. The attitude to the tax authorities in India have changed for the worse even stronger. As a result, instead of the additional profit to the treasury, the authorities reached only the weakening of its reputation, which invariably will affect the country’s economy in the future.