Bharti gets Rs50 cr IT bill for non-payment of tax
February, 23rd 2009
The Income Tax Department has slapped a bill of Rs50 crore on leading private telecom company Bharti Airtel for non-payment of taxes on interest paid on loans taken by it and allegedly furnishing wrong information to the tax department.
Bharti has contested the claim, but has also paid more than Rs40 crore to the department, an IT department official said.
The Indian firm was accused of non-payment of taxes on the interest paid by it on loans procured from ABN Amro Bank Stockholm Branch, the official said.
Contesting the claim of the tax department, Bharti said it was in full compliance of the interim orders passed in this case and awaits finality through the defined legal process.
The telecom firm had informed the IT department that interest on loans from ABN Amro Stockholm branch were exempt from taxation in India as per the India-Sweden tax treaty but the department found that the lender (ABN Amro) was a tax resident of the Netherlands, thus holding the companys claim for exemption to be incorrect.
Bharti had claimed that the interest payment was exempt from taxes as the loan was guaranteed by the Swedish Export Credit Guarantee Board, but the information was found incorrect as the authorities found that Bharti Tele-Venture, a holding company of Bharti stood guarantee for the loan.
Bharti Airtel, according to the tax department, gave certificates through undertakings and chartered accountants, mentioning that interest on loans were exempt from taxation in view of treaty between India and Sweden.
The certificates by the company also mentioned that the loan was guaranteed by the Swedish Export Credit Guarantee Board, based on which the exemption of tax on interest paid on loan was claimed.
Bharti Airtel had said, This is a case where both the contention of the revenue authority and the resultant demand raised by them are being contested by the company.
The matter is currently pending before the 1st Appellate Authority for adjudication, a Bharti spokesperson said.