The income from offshore supply of equipment on a CIF basis under a composite contract is not taxable in India

Court  : Delhi bench of the Income-tax Appellate Tribunal

Citation :  Tech nip Italy Spa Vs. ACIT (2010-TII-133-ITAT-DEL-INTL)

Brief : Recently, the Delhi bench of the Income-tax Appellate Tribunal (the Tribunal) in the case of Technip Italy Spa v. ACIT (2010-TII-133-ITAT-DEL-INTL) after applying the decision of the Supreme Court in the case of Ishikawajima-Harima Heavy Industries Ltd. v. DIT [2007] 288 ITR 408 (SC) held that the income from offshore supply of equipment on a Cost Insurance Freight (CIF) basis under a composite contract is not taxable in India.

Facts of the case

The taxpayer, a company incorporated in Italy, was awarded a turnkey contract by Indian Oil Corporation Ltd. (IOCL) for the designing, construction and commissioning of a Hydro-treater and Hydrogen facility at IOCL’s Guwahati Refinery. As per the terms of the Agreement, the assessee was required to supply equipment to IOCL and undertake construction/installation services and related design and engineering services. The consideration for same was denominated partly in Indian currency and partly in foreign currency.

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