The government today said it has identified a few cross-border merger and acquisition cases, including Vodafone's acquisition of Hutchison in India, where companies may have to be taxed.
"A few cases relating to cross border merger and acquisition deals have been identified for further examination by the revenue department. These deals are being examined for possible tax implications," Minister of State for Finance S S Palanimanickam said in a written reply to Lok Sabha.
The cases identified include the deal between Vodafone International Holding BV and Hutchison Telecommunication for acquiring Hutchison Essar, the deal of Sanofi Pasteur Holding with Merieux Alliance and Groupe Industriel Marcel Dassault for acquiring Shantha Biotechnics.
Besides, the agreement of New Cingular Wireless Services Inc with AT&T Mauritius for acquiring Idea Cellular, transfer of stake in GE Capital International services/Genpact India and SKR BPO Services deal with Barclays, Mauritius, for acquiring Intelnet Global Services also involve tax implication.
Recently, the Supreme Court had allowed the request of British telecom giant Vodafone to deposit Rs 2,500 crore as tax, as directed by it earlier, through banking wire transfer instead of bank draft.
Income tax department had asked Vodafone to pay Rs 11,218 crore in taxes for the acquisition of Hutchison's stake in the telecom joint venture in India in 2007.
The case relates to a deal in 2007 when Vodafone, through its group firm Vodafone International Holdings, bought Hutchison Telecommunications India's 67 per cent stake in Hutchison Essar for over $11 billion.
In October this year, Blackstone-owned Intelnet Global Services announced a strategic partnership with Barclays Bank Plc. As part of the partnership, Barclays has acquired a 12.75 per cent stake in SKR BPO Services, the holding company of Intelnet Global Services.
Last month, Finance Minister Pranab Mukherjee had said that actions have been taken in transactions between Sanofi Pasteur, Merieux Alliance and Groupe Industriel Marcel Dassault for acquiring Shantha Biotechnics Ltd, between New Cingular Wireless Services Inc and AT&T Maritius for Idea Cellular.
He added that New Cingular Wireless and MMM Holding sold their shares in AT&T Cellular to Tata Industries for $150 million and no tax deduction at source was done by Tata Industries, accordingly the Indian company paid Rs 45.50 crore towards tax.
Another case, Sanofi had paid Rs 648.54 crore to the taxman as the company did not deduct tax at source before making payment of 55 million euro to Merieux Alliance and Groupe Industriel Marcel Dassault for acquiring Shantha Biotechnics.