India: Reimbursement of costs for training and general insurance not included in fee for technical services

Posted on Updated on

The Mumbai Bench of the Income-tax Appellate Tribunal in the case of: Gemological Institute International Inc v. DCIT (ITA No. 4659/Mum/2014) and (ITA No. 385/Mum/2016) held that, the amounts received by the taxpayer were not taxed as technical service charges as reimbursement of training-related travel expenses, group insurance and other incidental expenses under a technical service contract. Referring to the transfer pricing study and the transfer pricing regulation, the Tribunal noted that there was no component of the profit that was embedded in the cost reimbursement and thus the reimbursements were not taxable.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s