India-France DTAA sparks tax row with Saint Gobain, HC orders higher outgo

Court says firm can pay "under protest", subject to final order; dispute could trigger similar rows in tax matters with MNCs, experts warn

The Delhi high court has issued notice to the income tax department on a tax dispute with Saint Gobain India Ltd which relates to interpretation of India's agreement with OECD countries.

In the meantime, the court allowed Saint Gobain to pay dividend to its French shareholder--Societe De Participations Financiers ET Industrielles (SPAFI)--for 2022-23 after paying higher withholding tax "under protest". The higher tax amount will be subject to the order by the court, it ruled.

The dispute, which relates to double taxation avoidance agreements (DTAAs) that India entered with OECD countries, has a potential to trigger similar rows in tax