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By Andrew Callus
LONDON, Feb 15 (Reuters) - Oil company Royal Dutch/Shell has asked the British government to raise the subjectof a tax dispute with India during Prime Minister DavidCameron's visit there next week, according to a source familiarwith the request.
The dispute blew up earlier this month when tax authoritiesrevalued by $2.7 billion a 2009 transaction by Shell with awholly-owned subsidiary, and claimed a tax payment was due.
It comes as India seeks to balance its need to shore up itsfinances by raising tax receipts with its desire to encourageforeign investment.
The Anglo-Dutch oil group's run-in with tax officialsfollows a long-running $2 billion Indian tax claim on Britishmobile telecoms group Vodafone which has dented foreigninvestor confidence in the country.
Finnish phone maker Nokia earlier this weekbecame the latest international company to protest against anIndian tax investigation.
The amount claimed from Shell was not specified, and anIndian tax official told Reuters it would be confined tointerest on that amount.
Shell has responded vigorously to the tax claim, which wasrevealed initially in press reports.
"Taxing the money received by Shell India is, in effect, atax on foreign direct investment, which is contrary not only tolaw but also to the spirit of the recent global trip by thefinance minister," Shell India Chairman Yasmine Hilton said onFeb. 4.
Shell's Indian presence goes back 80 years and, like otherbig oil companies, it has its eye on the country's growingmarket for natural gas and fuels.
Shell also has bitumen and lubricant operations in India andis the only one of the big-name international oil companies witha fuel retail licence in the country. It employs over 1,600people at a business services centre in Chennai.
The source, who spoke on condition of anonymity, said Shellhad not been invited to join a business delegation that willaccompany Cameron on the trip, but hoped he would raise theissue on their behalf.
A spokeswoman for Cameron declined to discuss issues he waslikely to raise, and would not say which companies wereaccompanying him. A Shell spokesman also declined to comment.
