After companies like Vodafone and Nokia were fined by Indian IT-officials for defaulting on taxes; Redington is the latest to join this infamous group. According to a report on ET, the official distributor of Apple’s products in India has been fined Rs 138 crore excluding interest by the IT officials.
Also Read - Suresh Prabhu to meet Apple leadership in Davos over India manufacturing plans
The fine is concerning Bahrain-based Investcorp Gulf Opportunity Fund Company’s investment in the Chennai-based Redington. According to the Transfer Pricing Officer, in order for the investment to take place, Redington formed Redington Gulf FZE in Dubai and transferred its 100 percent shareholding into it. Also Read - Apple is getting tougher on small retailers to keep discounts in check
Investcorp then bought 26 percent stake in Redington for $65 million in 2008 and sold back the stake to Redington India, for $114.8 million last year. The directive filed by Transfer Pricing Officer says that because of these ‘imputed profits’, Redington has been fined Rs 138 crore excluding interest.
Redington though will be given an opportunity to approach the Dispute Resolution Panel against the proposed move and only after hearing their defense will the Panel will pass the final order.