OUP India forced to pay back tax

Oxford University Press has lost its tax-exempt status in India and must pay back tax owed on profits it made in the country during the 1970s and 1980s.

The Supreme Court of India ruled that OUP was not entitled to a tax exemption, because it did not carry out the activities of a university in India. The case has again raised questions about OUP's status in the UK, where it does not pay any tax on its profits.

No one at OUP in the UK was available for comment, but OUP India said in a statement that it had not ruled out making an appeal.

"The judgment is being studied and further actions, if any, will be taken on the basis of legal advice, which we are seeking." It is not known how much money OUP owes to the Indian authorities, but the sum is "substantial", according to one industry source. OUP will
be faced with a significant cash impact on paying the taxes, but it is believed to have made provisions to cover them.

The publisher greatly improved its profitability during the year to end-March 2000, when its "surplus", or profit, more than doubled to £32.6m. OUP transferred £56m to Oxford University during the year.

The academic publisher has been trading in India from premises in Mumbai since 1912. It could claim to be exempt from taxation in India if it "existed solely for educational purposes and not for the purposes of profit", the court ruled.