Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: Central Excise rule to resale the machines to a new company :: VAT RATES :: empanelment :: due date for vat payment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: articles on VAT and GST in India :: ACCOUNTING STANDARDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARD :: VAT Audit :: cpt :: form 3cd :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: list of goods taxed at 4%
 
 
« News Headlines »
 Filing of online return for 4th quarter of 2016-17 — extension of period thereof
 CBDT simplifies ITR filing process from FY18
 Govt extends service tax return filing date to April 30
 No move to tax farm income, clarifies Arun Jaitley
 New board for indirect taxes to become operational from June 1
  9 changes that came into effect from April 1
 First time filing income tax? Here's all you need to know about Form 16 and Form 26AS
 New Opening Financial Controller Chartered Accountant (Manufacturing Plant) A Leading Company
 Income Tax Filing 2017: All you want to know about the single page ITR form SAHAJ
 How to benefit from investments in tax saving mutual funds
 60 per cent of income tax notices on fishy cash deposits returned

CBDT reopens 400 PE, M&A deals
December, 13th 2007
The spill-over effect of Vodafones battle with Indian tax authorities may prove costly for several other deal makers. The Central Board of Direct Taxes (CBDT) has reopened about 400 cases of big and mid-sized transactions that took place during the past six to seven years.

According to sources close to the development, the cases include foreign corporates and PE firms selling stakes of companies based in India, and not paying any capital gains tax.

One of the first such cases that the tax department is currently probing is Montreal-based Alcan Incs selling of the controlling stake in Indian Aluminium Company (Indal) to Hindalco Industries seven years ago, sources in the finance ministry said.

Significantly, there were around 300 PE deals clocked in India in 2006 alone. The tax department had earlier slapped a notice on Vodafone Essar, demanding $2 billion as capital gains tax over its $1-billion acquisition of a majority stake in Hutchison Essar, Indias fourth largest mobile telephone company. The case is now locked in the Bombay High Court.

When contacted, CBDT chairman R Prasad confirmed that the department had reopened many more cases similar to that of Vodafone, but refused to name the deals under the scanner.

We have found that there are many cases where foreign companies or PE firms sell their stakes of an Indian company. Many large transactions do take place in India, but we receive no tax at all. We have reopened all such cases that took place in the last six to seven years, Mr Prasad said.

Finance ministry sources say that the revenue department would not like to single out Vodafone, when there has been many large and mid-sized transactions in the country, involving foreign companies, where the tax department received no capital gains tax.

KPMGs executive director Vikram Utamsingh, specialising on M&A deals, argues that companies doing transactions through tax havens like Mauritius, should escape such a scrutiny.

In most cases, a foreign company invests in India through a Mauritius-based holding company. The seller does not sell the share of the Indian company, but those of the parent entity based in Mauritius. You cant ask for taxes then, he says.
 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - We Bring IT. Offshore software outsourcing company. We use Global Delivery Model (GDM) and believe in Follow The Sun principle

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions