Tata Sons got big relief from the tax departments. The tax demand of Rs 1500 crore sent by the GST department to the group has been canceled. Let us tell you that this matter was related to the settlement deal with Docomo.
Relief of Rs 1500 crore
According to a report by ET, the Adjudicating Authority of the GST Department has given relief to Tata Group’s holding company Tata Sons in this matter related to the settlement deal with Docomo. The authority has decided to remove the tax demand of Rs 1,500 crore imposed on the company. Officials associated with the case have been quoted as saying that this order of the Adjudicating Authority will serve as an example for companies involved in arbitration.
The GST department can go to the High Court
However, Tata Sons has not yet got complete relief from this matter because officials say that the GST department can go to the High Court against the order of the Adjudicating Authority.
$1.27 billion was paid
Tata Sons, a major part of the Tata Group, paid $1.27 billion to settle a dispute between its telecom company Tata Teleservices and Docomo, a Japanese telecom company. This money was given to Docomo by Tata Sons, but the GST department said that Tata Sons was actually paying the money for Tata Teleservices. Because of this, it seems that Tata Teleservices has borrowed money from Tata Sons and now they have to pay a tax (called GST), which is 18% of that amount.
Opposition of Tata Sons
The order of DGGI which came in 2019 was challenged by Tata Sons. According to Tata Sons, they had made this payment after the hearing of arbitration in a London court. Due to which there is no GST liability on them. Tata Sons argued that the question of GST liability does not arise in out of court settlement.
