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 »
 Know all about how to file ITR FY 2017-18
 Government extends sale of pre-GST goods with stickers of revised price till July 31
 All 7 ITR forms for assessment year 2018-19 activated for e-filing: Income Tax Department
 Check if new salary structure is income tax efficient
 GST refund drive extended till June 16
 5 income tax returns filing mistakes you must avoid
 Your complete guide to file income tax return
 Input Tax Credit refund drive till June 14
 File Your Income Tax Return for FY 2017-18 Immediately, Know Why
 Which ITR form to file if income is in dollars?
 5 investment lessons to maximize returns; here is all you need to know

Foreign banks under scanner of service tax authorities
April, 08th 2015

A day after Finance Minister Arun Jaitley sent a stern message to corporates and foreign investors saying levy of legitimate taxes is not terrorism, ET NOW learns that several leading foreign banks have come under the scanner of service tax authorities.

"The service tax department has kick-started an extensive probe against several leading foreign banks claiming service tax payments on the expenditure incurred by the head offices of these foreign banks which is attributable to domestic branches," two individuals familiar with the development told ET NOW. ET NOW was the first to report the development.

Documents relating to head office expenditure, tax returns of the foreign banks have been sought as part of the ongoing investigation and statements of bank officials are likely to be recorded, sources added. Some of the foreign banks have opposed the levy saying no entries have been made in their books of accounts relating to head office expenditure, and therefore service tax liability does not arise.

"The service tax authorities believe tax liability cannot be determined based on whether entries are made or not made in books of accounts. They have sought taxes based on the reverse charge mechanism under which entities in India are liable to pay service tax on services procured from entities based out of India," one of the two individuals cited above added.

If the standoff continues, the service tax authorities are likely to issue notices against 10-15 foreign banks in the coming weeks, sources added.

"The revenue's argument is as follows - If you are claiming an income tax exemption on the expenditure incurred by head offices, then foreign banks should also be paying service tax under the reverse charge mechanism. However, since for several decades, foreign banks have traditionally never accounted for the head office expenditure in their India books, this view of the department would be difficult to establish by reading the plain provisions of the service tax law. Given the difference of opinion, this matter is likely to be litigated extensively, if the revenue continues to hold the same position ," said Amit Kumar Sarkar, Partner, Grant Thornton India LLP.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Article Management Solutions System Article Management Software S

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