By Andrew Callus
LONDON Feb 15 Oil company Royal Dutch/Shell
has asked the British government to raise the subject
of a tax dispute with India during Prime Minister David
Cameron's visit there next week, according to a source familiar
with the request.
The dispute blew up earlier this month when tax authorities
revalued by $2.7 billion a 2009 transaction by Shell with a
wholly-owned subsidiary, and claimed a tax payment was due.
It comes as India seeks to balance its need to shore up its
finances by raising tax receipts with its desire to encourage
The Anglo-Dutch oil group's run-in with tax officials
follows a long-running $2 billion Indian tax claim on British
mobile telecoms group Vodafone which has dented foreign
investor confidence in the country.
Finnish phone maker Nokia earlier this week
became the latest international company to protest against an
Indian tax investigation.
The amount claimed from Shell was not specified, and an
Indian tax official told Reuters it would be confined to
interest on that amount.
Shell has responded vigorously to the tax claim, which was
revealed initially in press reports.
"Taxing the money received by Shell India is, in effect, a
tax on foreign direct investment, which is contrary not only to
law but also to the spirit of the recent global trip by the
finance minister," Shell India Chairman Yasmine Hilton said on
Shell's Indian presence goes back 80 years and, like other
big oil companies, it has its eye on the country's growing
market for natural gas and fuels.
Shell also has bitumen and lubricant operations in India and
is the only one of the big-name international oil companies with
a fuel retail licence in the country. It employs over 1,600
people at a business services centre in Chennai.
The source, who spoke on condition of anonymity, said Shell
had not been invited to join a business delegation that will
accompany Cameron on the trip, but hoped he would raise the
issue on their behalf.
A spokeswoman for Cameron declined to discuss issues he was
likely to raise, and would not say which companies were
accompanying him. A Shell spokesman also declined to comment.