Tax department asks DoCoMo to pay Rs 2,500 cr on Tata Tele award

Docomo had applied for a withholding tax certificate from the Indian tax department before the funds can be repatriated overseas.

NTT DoCoMo, the Japanese telecom major, has been slapped with a tax demand of up to Rs 2,500 crore, after it won Rs 8,256 crore as damages from Tata Sons on sale of its shares in Tata Teleservices. DoCoMo is the first multinational after Vodafone to face such a demand from the tax department in the country.

According to a legal source, the tax department is considering the arbitration award and damages as DoCoMo’s income and not as capital gains on the sale of its 26 per cent stake in Tata Teleservices. Under the tax laws, the tax rate on