Latest Expert Exchange Queries
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) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: VAT Audit :: due date for vat payment :: ACCOUNTING STANDARDS :: empanelment :: articles on VAT and GST in India :: list of goods taxed at 4% :: ACCOUNTING STANDARD :: ARTICLES ON INPUT TAX CREDIT IN VAT :: Central Excise rule to resale the machines to a new company :: TAX RATES - GOODS TAXABLE @ 4% :: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: cpt :: TDS :: VAT RATES
« News Headlines »
 Here's how to calculate tax payable on your capital gains
 Income Tax calculations for the financial year 2016-17
 CPE Events 17 October - 22 October 2016
 High Court raps I-T Department for wrong tax demand
  CBDT signs 5 advance pricing pacts with Indian taxpayers
 Finance ministry warns tax officials of action against GST protest
 Big changes for small units under GST
 Parliament’s winter session to begin on November 16 to expedite GST rollout
 Income-tax (27th Amendment) Rules, 2016 - 92/2016
 Announcement - Clarifications in Respect of MEF 2016-17
 Non-taxing GST apps to make filing income tax return less painful

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 2016 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