Both firms have challenged tax demands through writ petitions in high court in an alleged transfer pricing case
Mumbai: The Bombay high court on Monday asked the Indian units of Vodafone Group Plc and Royal Dutch Shell Plc to file rejoinders by 10 October to the replies filed by the income tax department in an alleged transfer pricing case.
Both the firms have challenged tax demands through writ petitions in the high court, which have been bunched together as both relate to transfer pricing.
Transfer pricing is the practice of arm’s length pricing for transactions between group companies based in different countries to ensure that a fair price—one that would have been charged to an unrelated party—is levied.
The case will now be heard on 17 October.
Vodafone challenged a transfer-pricing order over the issue of shares by its unit Vodafone India Services Pvt. Ltd. Shell India is fighting a tax order accusing it of underpricing an intra-group share transfer by ₹ 15,000 crore and consequently evading taxes.
The Vodafone and Shell cases are a fallout of retrospective amendments introduced in the national budget of 2012 that included capital financing under the transfer-pricing net.