Does the Vodafone ruling need a re-look? Andhra Pradesh High Court judgment in the case involving Sanofi Pasteur Holding (a French vaccine company) was the first time after the celebrated Supreme Court judgment in the Vodafone case and the consequent amendments to the Income-tax Act in 2012 that a court was adjudicating liability of foreign companies to capital gains tax on sale of shares of another foreign company, the effect of which was transfer of underlying shares and control of an Indian company. The facts of Sanofi are materially different from Vodafone. Unlike Vodafone, the transferor companies, the intermediary company ShanH and the transferee Sanofi, were registered in France and not in a tax haven like Cayman Island; the intermediary ShanH was not a post-box company; the transaction was covered by India-France tax treaty; and the transferors paid tax in France.
Posted on: Wed, 12 Jun 2013 13:11:36 +0000
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