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The Income Tax department suspects that HGS evaded tax on capital gains of around ₹1,000 crore in the deal with NXTDigital.
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HGS sold its healthcare services business to a Netherlands-based entity and later merged NXTDigital, a loss-making entity, into HGS. The tax authorities allege that this transaction was structured to avoid taxes.
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The Income Tax department is also investigating HGS under the General Anti-Avoidance Rule (GAAR) for allegedly avoiding taxes of around ₹1,700 crore through the merger with NXTDigital.
HGS has denied receiving any demand notices from the tax authorities. The company claims that it had furnished all necessary documents and answers during the IT survey last year and has not received any further communication. HGS asserts that the M&A process was in line with tax laws and is ready to contest any notices legally. The Income Tax department is examining evidence gathered during a survey in November 2023 at HGS offices in Mumbai and other cities.
The Hinduja Group owns several other companies, including Hinduja Leyland Finance, Hinduja Bank (Switzerland), Ashok Leyland, and PD Hinduja National Hospital and Medical Research Centre. This case highlights the ongoing scrutiny of large corporations for tax evasion and avoidance.
