Hinduja Group arm HGS charged with Rs 2,500 cr tax evasion

The Income Tax Department has alleged a tax evasion of about₹2,500 crore by Hinduja Global Solutions' (HGS).

An internal report, submitted earlier this month based on a probe carried over the past nine months, has charged HGS with the evasion.

Invoking the General Anti-Avoidance Rule, tax authorities have charged the company merging with a loss-making entity subsequent to divesting its healthcare business at a gain with the purpose of avoiding tax.


The HGS has denied receipt of any demand notice.

"Concerning the said M&A transaction, queries were raised in last year's IT survey, and suitable answers and documents were furnished, backed by the opinions of legal and tax experts. Since then, we have not received any such alleged demand notices," a spokesperson for Hinduja Global Solutions Limited said.

"We strongly believe that the M&A process was in line with the tax laws. If the tax authorities send notices, they would be legally contested as per prevailing procedures and laws," the official said.

Hinduja Global Solutions Limited sold its healthcare services business to wholly-owned subsidiaries of Betaine BV ('Buyer'), funds affiliated with Baring Private Equity Asia (BPEA). It subsequently merged NXT Digital (NDL), its digital media and communication business, into Hinduja Global Solutions (HGSL).

The income tax department in its findings said that NXT Digital was a loss-making company, and the merger was purely an instrument to avoid paying taxes and the capital gains.

"The investigation is completed and there was no purpose for the merger but to avoid taxes and that is why there is demand under GAAR of ₹1,500 crore and another ₹1,000 crore for capital gains," a senior official told ET, adding that soon a detailed notice will be sent to the company.

The department had conducted a survey on company's premises in this regard in November 2023.

"The company has no additional information to provide at this stage. The company will update the Stock Exchanges if the matter progresses and in case of any material information/ event is received in this regard," HBS then said in a notice to exchanges in November

The HGS is part of the Hinduja Group that owns Hinduja Leyland Finance, Hinduja Bank (Switzerland), Ashok Leyland, Ashok Leyland Foundries or Hinduja Foundries, Switch Mobility, PD Hinduja National Hospital and Medical Research Centre, Hinduja Tech Limited, and Hinduja Realty Ventures Limited among others.