I-T slaps Rs 300 cr tax claim on Star parent

The income tax department has slapped a tax claim of around Rs 300 crore (Rs 3 billion) on the Star group, Hong Kong, the parent of Star India. These claims are accumulated claims since 2000-2001.

According to income tax appellate sources, the income tax department said that in its investigations it found that the Star group, Hong Kong, had a permanent establishment in India through which it had been carrying out operations.

The case was heard in appeal in the Income Tax Appellate Tribunal in February. The matter is at present pending in the tribunal and awaiting the next hearing.

The income tax department argues that since the Star group, Hong Kong, is operating and earning income in India, it should pay taxes in India. Sources said that the Star group, Hong Kong, is contesting the demand, arguing that it is operating through Star India, which is paying taxes.

Responding from Hong Kong to Business Standard questions, the Star group said: "We are restrained from making comments on the case as it is under the appeal proceedings. What we would like to stress is that Star has always been operating under strict corporate governance and our tax filing is no different from other companies operating in India. And it is very common for a company to file tax appeals after receiving tax demands from the government."

G C Srivastava, chief commissioner, Surat, is presenting the case on behalf of the income tax department. New Delhi-based lawyer Dinesh Vyas has been appearing for the Star group, Hong Kong.

Sources maintained that Star India is separately assessed for tax and pays its dues.

Launched in 1991 with five television channels, Star pioneered satellite television in Asia and in the process catalysed explosive growth in the media industry in the region. Star now broadcasts over 50 services in seven languages and offers a comprehensive choice of entertainment, sports, movies, music, news and documentaries.

Reaching more than 300 million viewers in 53 countries in Asia, Star is watched by approximately 100 million viewers every day.