Tata Sons has got a big relief from the tax department. The tax demand of Rs 1,500 crore sent by the GST department to the group has been canceled. This tax demand case was related to the settlement deal with Docomo.
Relief of Rs 1,500 crore received
According to a report by ET, the adjudicating authority of the GST department has given relief to Tata Sons, the holding company of the Tata group, in this case related to the settlement deal with Docomo. The authority has decided to dismiss the tax demand of Rs 1,500 crore issued on the company. The report has quoted officials related to the case as saying that this order of the adjudicating authority will serve as a precedent for companies related to arbitration.
GST department can go to the High Court
However, this case against Tata Sons is not completely over yet. Officials say that the GST department can go to the High Court against the order of the Adjudicating Authority.
So much payment was made to Docomo
In fact, Tata Sons, the holding company of the Tata Group, paid $1.27 billion to settle a dispute between the group’s telecom company Tata Teleservices and Japan’s telecom company Docomo. This payment was made by Tata Sons to Docomo. The GST Department said that Tata Sons made this payment on behalf of Tata Teleservices. In such a situation, it should be treated as a loan received from Tata Sons to Tata Teleservices and due to this, GST liability arises at the rate of 18 percent.
Tata Sons’ argument – due to this there is no liability
Tata Sons had challenged the said order of the Directorate General of GST Vigilance (DGGI). The DGGI order came in 2019. Tata Sons said that the payment was made after the arbitration hearing in a London court. In such a situation, there is no GST liability on it. Tata Sons argued that the question of GST liability does not arise in an out of court settlement.
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