I-T dept collects Rs 550 cr tax under international taxation
May, 07th 2012
The Directorate of International Taxation of the Income Tax Department has recorded collection of Rs 550 crore as tax payments from foreign shipping companies doing business at Gujarat ports. This collection of taxes for financial year ended March 31, 2012, is also from income earned by non-resident and foreign companies in the state. The directorate further monitors tax deduction at source on remittances made outside India in form of various payments.
"In the recent past, a number of corporates have been found to have remitted huge amounts outside the country without any tax deduction in cases where the tax deduction was essential," sources in the I-T department said.
During the year 2011-12 the directorate collected over Rs 550 crore as tax under the section 172 of the Income Tax Act. Last fiscal the collection was over Rs 500 crore. With Rs 550 crore collection the target set for the state has been achieved, sources said. The taxes are collected for various categories which include business income of foreign company operating in the state, royalty, fee for technical services, and on freight that is loaded from Gujarat ports.
In addition, the directorate conducted transfer price audit of international transactions between two related parties one of which happens to be a based outside India. More than 120 audits were conducted by the I-T officials for the FY2011 which led to adjustments of over Rs 1,300 crore to the income of Indian entities. Previous year the adjustments were to the tune of Rs 1,010 crore. "These adjustments represent potential shifting of profits by these corporates out of country," I-T department sources said, adding that in some cases the magnitude of such adjustments ranged from Rs 100 crore to Rs 400 crore.