Case Law Details
This Article summarises a recent ruling of the Authority for Advance Rulings (A.A.R. No. 825 of 2009) in the case of Aramco Overseas Company B.V. (Applicant) on the issue of taxation of procurement support services rendered by the Indian liaison office (Indian office) of the Applicant.
The AAR ruled that the Applicant would be taxable in India in respect of income received by it for the procurement support services rendered by its Indian office in connection with purchase operations undertaken by other non-residents in India. The AAR further ruled that, in respect of the above income, the Applicant cannot claim exclusion from taxation in India if it did not undertake any purchase operations on its own account or act as a purchase agent of other non-residents.
Facts of the case and background
The Applicant, a company incorporated in the Netherlands, is a subsidiary of Saudi Arabian Oil Company (Saudi Aramco). It is a tax resident of the Netherlands. The principal business of the Applicant is to render services in relation to supply chain management and provide technical, financial and administrative support to Saudi Aramco and its group companies. The Applicant is remunerated at a mark-up of 5% on the cost incurred for rendering the aforementioned services, which is received in the Netherlands.
The Applicant has an Indian office for undertaking the following procurement support activities for its head office (HO) and other group companies in connection with the purchase operations undertaken by them:
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DEAR, SIR Can i get input credit of service tax paid on behalf of non resident. if service tax is excess deposit in first bill can get credit in payment of next bill.