Hinduja Global–NxtDigital Merger Faces Major Setback As Tax Panel Calls Deal 'A Tax Dodge'

The panel said that the search and seizure operations uncovered internal communications and executive statements describing “tax savings” as the main motive behind the merger. (Photo: Unsplash) Show Quick Read Summary is AI Generated. Newsroom Reviewed

The Approving Panel has ruled that the merger of Hinduja Global Solutions Ltd. with NxtDigital Ltd. was an “impermissible avoidance arrangement” under India’s General Anti-Avoidance Rules (GAAR), in a major setback for the Hinduja Group arm.

The panel disallowed Rs 1,203 crore in tax set-offs claimed by HGSL and directed the Assessing Officer to recover the full amount of tax along with interest and penalties. It held that the primary purpose of the merger was to gain a tax advantage rather than achieve genuine commercial or operation