This Article summarizes 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.
ABB Limited (applicant), an Indian company, has various business divisions such as power products and systems, automation systems, process automation and robotics systems. The appellant is a part of the ABB Group, which is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact.
CFTI cannot be considered as an institute or establishment which is specifically excluded from the definition of “commercial coaching and training centre” under section 65(27) of the Finance Act, 1994; it also cannot be considered as a “vocational training institute” for the purpose of exemption from service tax under the category of “commercial training and coaching service” in terms of Notification No. 24/2004-ST, dated 10.9.2004.
On the facts and circumstances of this case, we do not think that the proceedings in connection with the earlier application shall now be reopened and a decisive answer to the question should be given at this stage.
Hence, no income from offshore supplies accrues or arises or can be deemed to accrue or arise to the Applicant in India under the Indian Tax Law (ITL). The AAR also ruled that the Applicant does not have a Permanent Establishment (PE) in relation to offshore supplies. Therefore, no part of income from offshore supplies can be said to be taxable in India.
AAR Ruling: Referral fee received from an Indian based recruitment agency by a non-resident is not liable to tax in India in view of the provisions of India-UK Double Taxation Avoidance Agreement [Real Resourcing Limited (AAR No. 828 of 2009)].
The AAR held that the fee received by US Co from the Applicant is in the nature of business profits of US Co and the same is not taxable in India in the absence of US Co constituting a permanent establishment (PE) in India under the India-US tax treaty (Tax Treaty). Further, the Applicant is not required to withhold taxes under the Indian Tax Law (ITL) while making remittance to US Co as it has not derived any income chargeable to tax in India.
KSPG Netherlands Holding B.V. (applicant), is a company incorporated in Netherlands on November 6, 2008 with its registered office in Amsterdam. PG India is the private limited company incorporated under the Companies Act, 1956 on October 26, 2006, which was held by Pierburg GmbH until November 2008. During November 2008, Pierburg GmbH
Seagate Singapore International Headquarters Pvt. Ltd. (applicant) was engaged in the business of manufacture and sale of Hard Disk Drives (disks). It has been supplying disks to Original Equipment Manufacturers (OEMs) in India. In order to minimize the delays in the procurement of inputs from the applicant, the OEM proposed to put in place a Vendor Managed Inventory (VMI) model. Under the VMI model,
AAR Ruling: The amount received on account of assignment of rights, title, interest, obligations and duties in connection with the supply of products is not taxable in India in the absence of a Permanent Establishment and therefore, tax is not required to be withheld under section 195 of the Income tax Act while making remittance outside India [Laird Technologies India Pvt. Ltd. (AAR No. 793/ 2008)(2010-TIOL-06-ARA-IT)].
