SALARY REIMBURSEMENT NOT SUBJECT TO WITHHOLDING TAX AS FEES FOR TECHNICAL SERVICES: RULES TRIBUNAL
In a recent ruling[efn_note]Serco India Pvt. Ltd v. DCIT, TS-363-ITAT-2023 (DEL)[/efn_note], the Income Tax Appellate Tribunal, Delhi (“Tribunal”) while differentiating the rulings in Centrica India Offshore[efn_note]Centrica India Offshore Pvt. Ltd v. CIT, TS-237-HC-2014 (DEL)[/efn_note]and Northern Operating Systems[efn_note]C.C, CE & ST v. Northern Operating Systems Pvt. Ltd., (2022) 101 GSTR 391 (SC)[/efn_note] ruled that reimbursement of […]
ALIBABA SINGAPORE NOT A CONDUIT, ELIGIBLE TO TAX TREATY BENEFITS: RULES HIGH COURT
In a recent decision[efn_note]The Commissioner of Income International v. Alibaba.Com Singapore E-Commerce Private Ltd., TS-361-HC-2023 (BOM)[/efn_note], the Division Bench of Bombay High Court (“HC”) upholding the decision of the Income Tax Appellate Tribunal, Mumbai (“Tribunal”) dismissed the appeal filed the tax department. The tax department had alleged that the taxpayer was a conduit and acted […]
Tribunal emphasizes importance of TRC: Upholds eligibility of Mauritius based CIV for tax treaty benefits
In a recent ruling[efn_note]TS-308-ITAT-2023(DEL)[/efn_note], the Income Tax Appellate Tribunal, Delhi (“Tribunal”) recognized and upheld the importance of the Tax Residency Certificate (“TRC”) and held that a Mauritius-based Collective Investment Vehicle (“CIV”) registered as a Foreign Portfolio Investor (“FPI”) by the Securities and Exchange Board of India (“SEBI”) is entitled to the benefits provided under the […]
INCOME FROM PRE-CLINICAL LABORATORY SERVICES NOT TAXABLE IN INDIA: RULES TRIBUNAL
In a recent ruling[efn_note]M/s. Charles River Laboratories Inc. v. The Assistant Commissioner of Income Tax, International Taxation, [TS-296-ITAT-2023 (Bang)][/efn_note], the Income Tax Appellate Tribunal, Bangalore (“Tribunal“) ruled that income derived from providing pre-clinical laboratory services to Indian clients should not be subjected to taxation in India as it does not fall within the ambit of […]
NET WINNINGS FROM ONLINE GAMES: CALCULATION PRESCRIBED BY CBDT!
Recently, the Central Board of Direct Taxes (“CBDT”) has issued rules to calculate “net winnings” in case of online games and issued guidelines in relation to the same for further clarification. As background, the Finance Act, 2023 introduced a new provision under the Income Tax Act, 1961 (“Act”) – Section 194BA (applicable from July 1, […]
THE SAP CONUNDRUM: FACT OR LAW?
Recently, the Supreme Court in the case of Sap Labs India Private Ltd. v ITO[efn_note]Civil Appeal No. 8463 OF 2022[/efn_note], held that in transfer pricing matters, a High Court cannot be precluded from examining the correctness of the determination of the arm’s length price by the Tribunal in an appeal on the ground that it […]
OVERSEAS DIRECT INVESTMENT OVERHAULED: STEP IN THE RIGHT DIRECTION!
On August 22, 2022, the Department of Economic Affairs, Ministry of Finance issued the Foreign Exchange Management (Overseas Investment) Rules, 2022 (OI Rules) in supersession of the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004 (Erstwhile FEMA 120) and the Foreign Exchange Management (Acquisition and Transfer of Immovable Property Outside India) […]
ANALYZING REPORTING REQUIREMENTS FOR TRANSFER OF SHARES
Presently, foreign investments in India are governed by the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 (“NDI Rules”), the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019 (“Reporting Regulations”) (in respect of the payment and reporting requirements for foreign investments) and the consolidated foreign direct investment policy circular of 2020 […]
NEGOTIATING THE FOUNDER EMPLOYMENT AGREEMENT
One of the key contracts drafted during a fund raise is an employment agreement for the founder of the company undertaking an equity fund raise. Much has been spoken about the term sheet and the shareholders agreement; however interestingly, a number of times, the employment agreement gets executed only after the agreement to buy the […]
NEW AMENDMENTS TO RELATED PARTY TRANSACTIONS
On November 9, 2021, the SEBI (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2021 (RPT Amendments) have been notified by SEBI to further tighten the provisions governing related party transactions (RPT Provisions). By way of a brief background, the proposals for further amendment of the RPT Provisions were made under the Report of the […]