sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
« News Headlines »
 Companies (Significant Beneficial Owners) Amendment Rules, 2019
  Tax saving guide for FY 2018-19
 4 lesser known ways to save tax. Filing income tax returns?
 You do not have to pay TDS on FDs under this amount Income tax returns (ITR)
 Income-tax (15th Amendment) Rules, 2019
 How To Calculate Income Tax For Assessment Year 2020-21
 Financial Interim Budget 2019-20
 5 personal tax changes expected in Budget 2019
 Check how much tax would be levied on your income Income Tax returns Invested in debt schemes
 3 taxes no one should have to pay
  Tax saving guide for FY 2018-19

Revenue dept considers I-T Act amendments
January, 27th 2007
Fearing that a recent Supreme Court judgement in a tax litigation will have far-reaching consequences on collections, the revenue department is contemplating the option of an amendment to the Income Tax Act. 
 
The department is currently engaged in assessing the immediate revenue loss that it might incur, as well as the judgements impact on litigation with regards to taxation of services rendered by several other foreign firms for Indian companies. 
 
The department is also examining the option of filing a review petition with the Supreme Court seeking a fresh hearing by a larger bench. 
 
The department is examining the wider implications of the judgement and its implications on revenue collection, before deciding on the final course of action, official sources said. 
 
The exercise has been initiated in the wake of the recent Supreme Court order, in the case of Ishikawajma-Harima Heavy Industries Ltd, which waived the tax liability on the multinational firm for payments received by the Indian counterpart for offshore supply of equipment and materials. 
 
The order will have far-reaching effects on the taxation of payments made by Indian firms operating in India for the services rendered by foreign companies in their overseas projects. 
 
Japanese firm Ishikawajma had entered into an agreement with Petronet LNG Ltd for receiving and degasification facility in Gujarat. The agreement included offshore supply and services, onshore supply and services, construction and erection work. 
 
The Authority on Advance Rulings (AAR) had earlier ordered that the Japanese firm is liable to pay tax on the payments received by Petronet LNG for offshore supply of equipment and materials, even under the India-Japan Double Taxation Avoidance Treaty. 
 
The AAR held that the supply of goods and rendition of service is attributable to turnkey projects in India. However, the Supreme Court held that these payments could not be taxed in India, since the transactions occurred outside the country. 
 
The judgement has clarified that sufficient territorial nexus between rendering of the services and territorial limits of India is necessary to make offshore services taxable in India. 
 
The entire contract would not be attributable to operations in India, since the test of residence is that of the tax payer and not that of the recipient of such services, said the order. 
 
Further, the fact that a contract is signed in India does not matter if the activities (offshore supply) were outside India and therefore cannot be deemed to accrue or arise in India. 
 
Besides turnkey projects in the infrastructure sector and project exports, the ruling may also affect an AAR judgement on the hospitality industry. 
 
In the case of Luxembourg-based International Hotel Licensing Company the advertising and sales promotion firm for Marriott hotels the AAR had ruled that payments received by Indian arm of the hotel Marriott will be taxed in India, since the agreement was entered into in India and payments were received in India. 
 
This ruling would have otherwise affected the sale and promotion activities of all hotel chains operating in India.
Home | About Us | Terms and Conditions | Contact Us
Copyright 2019 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Outsourcing Company Offshore Software Outsourcing Software Outsourcing Company India Offshore Outsourcing Company India Software BPO Software Business Process Outsourcing Software Outsourcing India Offsho

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions