The Income Tax Department has accused Hinduja Global Solutions (HGS) of tax evasion of approximately Rs.2,500 crore, according to a report.
Reetu | Sep 25, 2024 |
Hinduja Group arm HGS accused of Rs.2500 Crore Tax Evasion
The Income Tax Department has accused Hinduja Global Solutions (HGS) of tax evasion of approximately Rs.2,500 crore, according to a report.
The allegations against Hinduja Global Solutions are detailed in a recent internal report issued after a nine-month investigation. Tax officials, invoking the General Anti-Avoidance Rule, say that HGS merged with a loss-making company after selling its successful healthcare sector to avoid paying taxes, the report said.
According to the report, a representative for Hinduja Global Solutions Ltd stated that “questions about the said M&A transaction were raised in last year’s IT survey, and appropriate answers and documents were furnished, backed by the opinions of legal and tax experts. We have not received any of the alleged demand notices since then.”
“We are certain that the M&A process was in compliance with tax regulations. If the tax authorities issue notices, they will be legally challenged in accordance with current procedures and legislation,” the official stated, according to the report.
Hinduja Global Solutions Ltd has sold its healthcare services sector to Betaine BV, a unit of Baring Private Equity Asia. Following the transaction, the company merged its digital media and communication division, NXT Digital (NDL), with Hinduja Global Solutions.
According to the findings of the Income Tax Department, NXT Digital was a loss-making firm, and the merger was exclusively intended to evade taxes and capital gains, the report stated.
The report mentioned that a senior official stated that the probe was concluded and that the merger served no purpose other than to evade taxes. Therefore, a demand for Rs.1,500 crore under GAAR has been made, with an additional Rs.1,000 crore for capital gains.
As part of the investigation, the department carried out a survey of the company’s premises in November 2023. At the time, Hinduja Global Solutions stated, “The company has no further information to provide at this time. The company will notify the stock exchanges if the matter proceeds and if any relevant information or event is received in this regard.”
Hinduja Global Solutions is part of the Hinduja Group, which also includes Hinduja Leyland Finance, Hinduja Bank (Switzerland), Ashok Leyland, and Hinduja Tech Limited, among others.
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