I-T dept accuses Hinduja Global Solutions of Rs 2,500 crore tax evasion
The Income Tax Department has accused Hinduja Global Solutions (HGS) of evading taxes amounting to around Rs 2,500 crore, according to a report by The Economic Times.
A recent internal report, following a nine-month investigation, outlines these allegations against Hinduja Global Solutions. Tax officials, citing the General Anti-Avoidance Rule, claim that HGS merged with a loss-making company after selling its profitable healthcare division to avoid paying taxes, the report said.
The report quoted a spokesperson for Hinduja Global Solutions Ltd as saying, “Concerning the said M&A transaction, queries were raised in last year’s IT survey, and suitable answers and documents were furnished, backed by the opinions of legal and tax experts. Since then, we have not received any such alleged demand notices.”
“We strongly believe that the M&A process was in line with the tax laws. If the tax authorities send notices, they would be legally contested as per prevailing procedures and laws,” the official said, as mentioned by the report.
Merger faced tax evasion notice
Hinduja Global Solutions Ltd sold its healthcare services division to Betaine BV, a subsidiary of Baring Private Equity Asia (BPEA). After the sale, the company merged its digital media and communication business, NXT Digital (NDL), with Hinduja Global Solutions (HGSL).
According to the Income Tax Department’s findings, NXT Digital was a loss-making entity, and the merger was designed solely to evade taxes and capital gains, the report said.
The report quoted a senior official as saying that the investigation has concluded, and the merger served no other purpose but to avoid taxes. As a result, a demand of Rs 1,500 crore under GAAR and an additional Rs 1,000 crore for capital gains has been raised.
Hinduja Group under tax scrutiny
The department conducted a survey at the company’s premises in November 2023 as part of the investigation. At that time, Hinduja Global Solutions said, “The company has no additional information to provide at this stage. The company will update the Stock Exchanges if the matter progresses and in case any material information/ event is received in this regard.”
Hinduja Global Solutions is part of the Hinduja Group, which also owns entities such as IndusInd Bank, Hinduja Leyland Finance, Hinduja Bank (Switzerland), Ashok Leyland, Hinduja Tech Limited, and PD Hinduja National Hospital and Medical Research Centre, among others.
First Published: Sep 25 2024 | 10:56 AM IST