[ad_1]
Tata Sounds, the Tata Group's holding company, could get a Goods and Services Tax (GST) bill of about 1,600 crore on its $ 1.2 billion payment to the company Japanese NTT DoCoMo in 2017 to settle their 2-year-old dispute
The Central Council of Customs and Excise (CBIC) is investigating whether the transaction, which took place more than a year ago, falls under the GST, sources told the newspaper. ] The tax liability of the transaction could fall on the Tata group since NTT Docomo is a foreign entity, according to sources quoted by the newspaper.
Read – NTT DoCoMo Receives $ 1.2 Billion from Tatas
The Ministry of Finance reportedly began investigating this transaction after obtaining the approval of Finance Secretary Hasmukh Adhia, earlier this year.
The ministry still has not sent notice to Tata Sounds as the investigation report has not been finalized, the daily reported. [19659002] Cases involving stock transactions or the awarding of arbitration to a foreign company by a domestic company have so far been dealt with exclusively under the provisions relating to the direct tax.
In this case, however, the Income Tax Department finds that a common approach has been adopted. It is the partners of the joint venture that have ensured that the arbitration award is executed, which has led to the transactions under GST.
Tata Sons paid the amount of the arbitration to Docomo so that it could not obtain any badets of the Tata group in Tata. Teleservices, and so that it removes all other execution actions elsewhere.
Read – Tata Sons writes an amount of 28 000 crore in the telecommunications sector: report
According to the GST law, the obligation to refrain from any act, to tolerate an act or a situation, or to make an act in lieu of payment would be considered as a provision of services.
The concept of forbearance was introduced in the service tax system in 2012. There is therefore virtually no precedent for such a case in domestic law.
In November 2009, DoCoMo acquired a 26.5% interest in Tata Teleservices for an amount of approximately 12,740 crore (Rs. 117 per share). [19659002] Under an agreement reached in 2008, in the event that the company would retire within five years, it would receive a minimum of 50% of the acquisition price.
In April 2014, DoCoMo decided to leave the joint venture. He asked for 58 Rs per share or 7,200 crores for Tatas.
But the Indian group offered only Rs 23.34 per share, in accordance with RBI guidelines, according to which an international corporation can only take out its investment at a value "not exceeding had been obtained on the basis of return on equity ".
The Japanese company then dragged the Tatas to international arbitration where it had won a $ 1.18 billion award.
Court requesting the execution of the arbitration decision.
The Delhi High Court ruled in favor of DoCoMo, authorizing the unblocking of the bridges to allow the Tatas to pay the sum.
After payment, all Tata Teleservices shares held by DoCoMo were transferred to Tata Sons and the companies designated by Tata Sons.
[ad_2]
Source link
