India: Research & Development expenditure qualified for deduction prior to approval
The Delhi High Court in the case of Maruti Suzuki India Ltd v. Union of India & Anr (W.P. (C) 9306/2015, dated 4 August 2017) held that Research & Development (R&D) expenditure acquired in earlier years is eligible for weighted deduction
See MoreIndia: Government imposes 10% customs duty on imported mobile phones
The government of India on 1 July 2017, has imposed 10% basic customs duty on mobile phones and parts like charger, headsets, battery and USB cable to boost domestic manufacturing. The 10% customs duty will be levied on imported cellular mobile
See MoreIndia: Multilateral Competent Authority Agreement on Exchange of CbC reports enters into force
The Ministry of Finance on 28 July 2017 has issued a Notification (No. 75/2017), which announces that the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country (CbC) Reports entered into force for India on 12 May 2016 and
See MoreIndia: Tribunal decision on foreign exchange fluctuation gain or loss and arm’s length pricing
The Income-tax Appellate Tribunal in the case of ACIT v. Rajratna Metal Industries Ltd. held that a foreign exchange fluctuation gain/loss is an operating item and is not to be excluded for the purpose of computing the arm’s length price
See MoreIndia introduces CbC reporting requirements
India has included a country-by-country (CbC) reporting requirement in section 286 of the Indian Income-tax Act, 1961, with effect from the financial year 2016-2017. The requirements are principally in line with BEPS Action 13. The first round of
See MoreIndia: CBDT issues final rules for valuation of unquoted shares
The Central Board of Direct Taxes (CBDT) on 12 July 2017 has issued a notification prescribing the method for valuation of unquoted shares for the purposes of Section 56(2)(x) and Section 50CA of the Income-tax Act 1961. The rules will be effective
See MoreIndia: Physical presence in the source state is not necessary to constitute a service PE
A recent decision of the Bengaluru Bench of the Income-tax Appellate Tribunal (Tribunal) in the case of: ABB FZ-LLC v. DCIT [ITA(TP) No. 1103/Bang/2013, assessed the India-UAE (United Arab Emirates) Double Taxation Avoidance Agreement (tax treaty)
See MoreIndia: Government removes additional excise duty on tobacco, cigarettes under GST
After the GST implementation in India, the finance ministry has removed an additional excise duty on tobacco, pan masala and cigarettes with effect from 1 July 2017. The revenue department also withdraws the central excise notification dated
See MoreIndia: GST Rates for Goods and Services approved by GST Council
The GST Council held its 14th meeting in Srinagar on 18 May 2017 and 19 May 2017. In the meeting, the GST council has approved seven GST rules relating to Registration, Invoice, and Valuation, Input Tax Credit, Payment, Refund and Composition. The
See MoreIndia: Income Tax Appellate Tribunal rejects internal comparable
The Ahmedabad Bench of Income-tax Appellate Tribunal on 24 may 2017, in the case of Inductotherm (India) Pvt. Ltd. v. DCIT held that "internal costs plus method" do not apply to benchmark exports of finished goods to a related party when there are
See MoreIndia: CBDT notifies rule for secondary adjustments in transfer pricing
The CBDT has notified a new "Income Tax Rule 10CB" which stipulates a deadline for the reimbursement of excess money (90 days) and the applicable interest rate (separate interest rates for transactions in INR / foreign currency) taken into account
See MoreIndia: CBDT publishes a draft notice on special transitional provisions for a foreign company based in India
The Finance Ministry on 15 June 2017, issued a draft notification of transitional provisions for foreign companies in the first year of becoming resident based on their place of effective management. The notification has clarified that the tax on
See MoreIndia: CBDT notifies new safe harbour regime for cross-border transactions
The Central Board of Direct Taxes (CBDT) on 7 June 2017, has issued a new, relaxed, safe harbour regime in order to reduce transfer pricing disputes. The move is aimed at providing certainty to taxpayers, aligning safe harbour margins with industry
See MoreIndia signs the Multilateral Convention to implement tax treaty related BEPS measures
The Finance Minister, Arun Jaitley, on 7 June 2017 in Paris on behalf of India, signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting. About 70 countries at all levels of development
See MoreIndia: SC rules that income from the sub-licensing of property is not taxable as business income
The Supreme Court (SC) in the case of Raj Dadarkar and Associates v. ACIT (Civil Appeal No. 6455-6460 OF 2017), decided that the income from the sub-licensing of the property is taxable as house property income and not business income. Simply
See MoreIndia: Reimbursement of costs for training and general insurance not included in fee for technical services
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
See MoreIndia: Cabinet approves signing of MLI to implement tax treaty related BEPS measures
The Union cabinet on 17 May 2017, approved the signing by India of the Multilateral Instrument (MLI) to implement into bilateral tax treaties the tax treaty-related measures arising from the OECD / G20 BEPS Project to tackle base erosion and profit
See MoreIndia: Latest update on country-by-country reporting
India has recently included a country-by-country (CbC) reporting requirement in section 286 of the Indian Income-tax Act, 1961, with effect from the financial year 2016-2017. The first round of CbC reports, if applicable, must be submitted to the
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