Income Tax : Tax on dividends, interest, royalties and FTS earned by non-residents is governed by the more beneficial rate under the Income-tax...
Income Tax : The issue is no longer res integra as it has been held by Hon’ble ITAT Mumbai in case of Bennet Coleman & Co. Ltd. Vs ITO(TD...
Income Tax : Section 115A of the Income-tax Act provides for determination of tax in case of a non-resident taxpayer where the total income inc...
Income Tax : A recent ruling of the Supreme Court (SC) in a batch of cases, with the lead case being that of Bharti Cellular Ltd. (Taxpayer), o...
Income Tax : As per Memorandum on Finance Bill, 2010 a source rule was inserted in section 9 of Income-tax Act in 1976 with an intention of bri...
Income Tax : An issue is under debate as to whether payments made by the Indian company to foreign company towards reimbursement of the salary ...
Income Tax : The finance ministry is hoping to recover about Rs 10,000 crore from non-resident service providers to oil and gas explorers in I...
Income Tax : ITAT Bangalore dismissed the Revenue’s appeal after holding that the Assessing Officer failed to provide adequate reasons for de...
Income Tax : Delhi High Court dismisses appeals, reiterating Supreme Court ruling that payments for software use/resale are not royalties under...
Income Tax : The Delhi High Court ruled that subscription fees for Salesforce CRM software are not royalty income under the India-Singapore DTA...
Income Tax : ITAT Delhi held that amount received by the assessee from providing SAP support services and IT support services is not covered wi...
Income Tax : Assessee in all these appeals is Honda SIEL Cars Ltd. (hereinafter referred to as the Assessee). Question of law that is raised is...
A recent ruling of the Supreme Court (SC) in a batch of cases, with the lead case being that of Bharti Cellular Ltd. (Taxpayer), on whether any manual intervention is involved in the technical operations by which a cellular service provider, such as the Taxpayer, is given facility for interconnection. If manual intervention is involved, the payments for such facility would be considered as ‘fees for technical services’ (FTS) under the Indian Tax Laws (ITL) and the Taxpayer would be required to withhold taxes. In this context, one may recall that the Delhi High Court (HC) [319 ITR 139] had earlier held that as these services do not involve any human interface, these cannot be regarded as FTS as contemplated under the ITL.
The receipts in the nature of referral fees do not constitute “fee for technical services”. Further, in the absence of a PE in India, the same cannot be subject to tax in India.
The assessee, a division of Technical Resources Prt. Ltd. Australia, had entered into contracts with Rio Tinto India Pvt. Ltd. (RTIPL) for evaluation of coal deposits in Maharashtra and Orissa and for corresponding feasibility studies for transporting the same.
Mumbai Tribunal Ruling: Fees for Technical Services, even if rendered outside India, are taxable consequent to retrospective amendment in Section 9 by the Finance Act, 2010 (Ashapura Minichem Limited v. ADIT)(ITA No. 2508/M/2008)
The assessee, an Indian company, entered into an agreement with a Chinese company for bauxite testing services in its laboratories (outside India) and for preparation of test reports. The assessee filed an application u/s 195(1) in which it argued that as the services were rendered outside India and the recipient did not have a permanent establishment in India,
This Tax Alert summarizes a recent ruling of the Authority for Advance Rulings (AAR) in the case of Ernst and Young Pvt. Ltd. (Applicant) on the taxability of payments made for support services provided by an affiliate in the UK to the Applicant. The AAR held that the provision of support services does not ‘make available’ any technology to the Applicant and, hence, the payments made are not taxable in India as ‘fees for technical services’ (FTS) under the India-UK tax treaty (Tax Treaty).
As per Memorandum on Finance Bill, 2010 a source rule was inserted in section 9 of Income-tax Act in 1976 with an intention of bringing to tax fees for Technical Services by creating a deeming fiction that even in cases where services are provided by a non-resident outside India, consideration for such services will be taxable in India so long as services are utilised in India. The source rule effectively means that the situs of the rendering of ser-vices is not relevant.
The finance ministry is hoping to recover about Rs 10,000 crore from non-resident service providers to oil and gas explorers in India. Finance Minister has inserted a clarification in the Finance Bill 2010-11 that will stop these companies and other service providers who had so far used a simpler tax regime to claim a lower tax rate.
