Income tax slaps notice on Cadbury, Kraft; seeks takeover details
February, 01st 2011
The income-tax department has served a notice on Cadbury India and its overseas parent, Kraft Foods Inc , seeking details of its $19-billion global takeover of Cadbury last year. The notice follows a directive from the finance ministry after a public interest petition was filed in the Delhi High Court in 2010 claiming that Kraft had completely and illegally avoided tax liabilities related to the sale of shares and capital assets in India.
The move is the latest in a series of efforts by the Indian revenue department to tax overseas deals, the most famous being the Vodafone deal.
I-T officials confirmed the development. An enquiry is on and we are in the process of collecting the details of the transaction, a senior official said.
A Kraft Foods spokesperson sought to play down the significance of the notice.
The court has not granted any relief to the petitioner and has instead suggested to the petitioner to file a representation with the government and the Indian tax authorities to take appropriate steps to respond to the queries raised.
Kraft Foods is fully committed to complying with the Indian law and is responding to queries raised by the Indian tax authorities. Senior officials close to the development said the India business is a very small part of the overall global acquisition of Cadbury Plc UK shares by Kraft Foods.