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 :: ACCOUNTING STANDARDS :: TDS :: TAX RATES - GOODS TAXABLE @ 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: cpt :: articles on VAT and GST in India :: ACCOUNTING STANDARD :: form 3cd :: VAT RATES :: Central Excise rule to resale the machines to a new company :: due date for vat payment :: list of goods taxed at 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes
 
 
« General »
 How to claim tax benefit on tuition fees under Section 80C
 Online Income Tax grievance redressal facility launched at 60 offices
 Demonetisation impact on government tax revenue marginal; direct tax personal income grew at above budget estimates
 ICAI seeks more accountability, transparency in defence sector
 Will Budget help double farmers’ income?
 Verify online deposits made post demonetisation, income tax department asks taxpayers
 Union Budget 2017: Best budget is do not change anything, do no harm, implement well
 Why salaried class deserves standard deduction
 3 new taxes that Modi government could introduce, but won't
 Tax gains may showcase demonetisation windfall
 Tax exemption for ELSS will help broaden investor base, channel household savings

Indian companies need not withhold tax for data processing services
May, 17th 2011

Indian firms outsourcing routine work to their overseas subsidiaries would not have to deduct withholding tax on the payments made to them.

In a landmark ruling, the Authority of Advance Ruling (AAR) has held that firms are exempted from deducting the withholding tax on the payments made for services like transcription and data processing.

Allowing the appeal of a Chennai-based RR Donnelley Outsource, AAR held that until the work is in the nature of technical, managerial or consultancy, it does fall under that services mentioned under the Income Tax Act.

RR Donnelley Outsource was outsourcing its routine work to its UK-based unit RRD UK and paying accordingly. The tax department had asked to pay duty on that and it was challenged before AAI.

Allowing the appeal, the authority said, "The services rendered by the RRD UK (data processing, print management, etc.) are not tantamount to any managerial, technical or consultancy services. Hence the consideration received for such services are not taxable."

AAR expressed its views while examining whether the amount received by RRD UK under the data processing services agreement is taxable as 'fees for technical services', under the Income Tax Act and the Double Taxation Avoidance Agreement (DTAA) between India and the United Kingdom.

It said the amount received by RRD UK is not taxable as per Article 13 of the Indo-UK DTAA.

"In our view, there is no transfer of technical skill or know-how while rendering the service by RRD UK to RRD India. As per Article 13 of the Indo-UK agreement, RRD UK is not rendering any managerial or technical services to RRD India and therefore the payment received is not eligible to tax," AAR said.

Moreover, since the amount received by the RRD UK is not taxable, the question of withholding tax by RRD India "does not arise", it added.

RR Donnelley India Outsource (RRD India) is an Indian company which provides solutions in commercial printing, direct mail, financial printing, call centres, logistics and digital photograph.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Sitemap

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