MUMBAI Feb 15 An Indian court ruled on Friday
that French drugmaker Sanofi SA is not liable to pay
local capital gains tax for its 30 billion rupee ($556.64
million) acquisition of Indian vaccine maker Shantha
Biotechnics, a lawyer for Sanofi said.
Sanofi bought Hyderabad-based Shantha Biotechnics in 2009
through its acquisition of French firm ShanH, which owned a
majority stake in the Indian drugmaker.
Indian tax officials had demanded more than $185 million in
capital gains tax on the acquisition from Sanofi India
. Sanofi has maintained that the acquisition was
subject to tax in France, and challenged the demand in the
Andhra Pradesh High Court.
In a similar case, India's Supreme Court last year rejected
a $2.2 billion tax demand on British telecoms firm Vodafone
over its acquisition of Hutchison Whampoa Ltd's
Indian cellular business in 2007.
India is again seeking to tax Vodafone after a law change
enabled it to tax already-concluded deals, which Vodafone is
"The court has maintained that, according to a business
treaty between India and France, this transaction can be taxed
only in France," said Rohan Shah, managing partner of Economic
Laws Practice in Mumbai, who represented Sanofi.
The ruling could not immediately be independently verified
In a statement on Friday, Sanofi said it was reviewing the
contents of the judgment announced by the high court.
Shares in Sanofi India rose 3.7 percent to 2,323.10 rupees
on Friday, outperforming the wider Mumbai market, which
fell 0.15 percent.
($1 = 53.89 rupees)
(Reporting by Kaustubh Kulkarni; Editing by Tom Pfeiffer and