Tax related regulatory affairs are in limelight in
India these days. The chief among these issues is the transfer
pricing laws of India that are claimed to be violated by many
multi national telecom companies in India.
For instance, Shell
India has received a transfer pricing order from Indian tax
authorities. Similarly, Nokia
has been accused of violating income tax and transfer pricing laws of
India. So much so that forensics
analysis of Nokia’s computer used to download software in India
has been undertaken by tax officials.
Similarly, the vexing tax troubles of Vodafone are
not coming to an end. Vodafone is still struggling with the
retrospective tax demands by Indian tax authorities. It has been
claimed that Vodafone
may invoke arbitration for fresh tax demands by India. Now the
tax authorities of India have issued a transfer pricing order against
Vodafone.
Vodafone will challenge this order that arose due to
the sale of shares of its Indian unit to a Mauritius-based group
company. Vodafone maintains that share subscriptions are not covered
by transfer pricing rules either in India or internationally and it
has no basis in law.
Vodafone has also filed a writ petition challenging
the jurisdictional issues on the basis of precedent established in
the recent Vodafone International Holdings BV - Hutchison Supreme
Court judgement.
Meanwhile Indian legislature has also undertaken few legislative steps to strengthen taxation laws of India and to prevent tax evasion in India. The next session of the Parliament may witness some regulatory issues in this regard.
