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 »
 Here's how taxpayers can revise their ITR filing
 16 LPA-Opening Urgent Opening with BIG 4 Client for Statutory Audit
  When and how to revise tax returns
 How and why to check income tax return (ITR) status
 10 things you need to know about filing your Income Tax Returns
 Here’s what you should know Are you liable to pay advance tax?
 How new property tax law will affect you
 Zero income tax for women
 What to do if you missed income tax return deadline
 Haven’t filed your ITR yet? Now use updated forms to file tax return Income Tax efiling
 File your ITR without Form 16; here is how Income tax returns filing

Higher tax for JVs with foreign cos, rules AAR
August, 09th 2008

Joint ventures with a foreign entity could be treated as Association of Persons (AOP) and attract a higher rate of income tax applicable to Indian residents. The Authority for Advance Rulings (AAR) in a case related to a JV between Austrias Geoconsult and Rites and Secon ruled it would be treated as an AOP. Under the income-tax laws, an association of person is considered legally to be a resident of India and is taxed at similar rates at which an individual is taxed.

The ruling came in response to Geoconsults query about taxability of the earnings made by its joint venture company with Indian construction groups Rites and Secon. The present case dealt with the earnings made by the joint venture as part of its contract with Himachal Pradesh Road and Other Infrastructure Development Corporation (HPRIDC), for project consultancy to develop seven tunnels across the state of Himachal.

Geoconsult, which claimed to have rendered managerial and consultancy services, contended that it did not have any permanent establishment in India. Hence, it was argued that its earnings be termed as fees for technical services which attracts 10% tax deduction on its gross receipts. The revenue department, on its part, referred to the contractual agreement to highlight that a representative of the Austrian company stayed in India to oversee the project activities.

A close look into the various clauses (of the joint venture agreement) reveals that all essential ingredients of an AOP, stand satisfied in this case (Geoconsult-Rites-Secon combine), an AAR bench chaired by P V Reddi said. The quasi-judicial body in its ruling has directed the combined entity to pay tax at 41% on its net earnings made in India.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Experience

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