India Releases International Tax Announcements

Posted on September 9th, by Global Tax Weekly in International Taxation. No Comments

In India, in the context of the country’s recent reversal on its retroactive tax stance, which has impacted on various international tax disputes in which the authorities are embroiled, the Government has released a statement to the effect that it does not intend to pay interest on any tax amounts refunded.

India also recently announced a one-month extension to country-by-country reporting regime deadlines. The CbC report notification, required two months prior to the furnishing of the CbC report, in Form No. 3CEAC, may be filed on or before December 31, 2021, rather than on or before November 30, 2021, the Government stated.

For more information on this, and other topical international tax matters, please visit:

India Makes Reverse On Vodafone Tax Dispute

Posted on August 30th, by Global Tax Weekly in Corporation Tax. No Comments

The Indian Government has announced that it will be walking back the unpopular retroactive tax provisions introduced to the tax code as part of a tax dispute with telecoms giant, Vodafone.

The dispute involving Vodafone related to the UK firm’s acquisition of Hutchison Essar and the Indian Government’s claims that the transaction should be subject to capital gains tax. Vodafone has consistently maintained that it is not liable for a USD2.2bn bill in back taxes and penalties relating to the deal.

In January 2012, the Indian Supreme Court ruled in favor of Vodafone stating that transfers of non-resident companies made by non-residents should not attract Indian capital gains tax. The Government at the time, however, defied the ruling by amending Section 9 of the Income Tax Act 1961 with retroactive effect from 1961, the year in which India’s current income tax legislation … Read More »

Indian Software Transactions To Be Treated As Sales

Posted on March 18th, by Global Tax Weekly in Business. No Comments

In India, the Supreme Court has released a landmark ruling to finally settle years of litigation on the tax rules for cross-border sales of software to the Indian market.

The ruling, delivered in the case of Engineering Analysis Centre of Excellence v. the Commissioner of Income Tax grouped numerous taxpayers’ appeals, all contesting the Indian authorities’ assertion that income received by non-resident suppliers from the sale of software in India should be taxable as royalties.

Instead, the Supreme Court sided with the appellants’ argument that software transactions should be treated as sales, not the provision of the right to use software, and as such should be treated as business income, not as royalties, for the purposes of India’s tax treaties and domestic tax withholding rules.

The Supreme Court, after analyzing the text of Article 12 in various Indian tax treaties, concluded that this … Read More »

India Reduces Time-Period For Investigations

Posted on February 15th, by Global Tax Weekly in Individual Taxation. No Comments

The Indian Government has announced its intention to reduce the time-period during which the tax authority can probe an individual’s tax affairs. Under the change, the authority will be able to investigate a taxpayer only within three years of the relevant year, rather than the current six years. However, investigations may occur up to ten years after the year in question in the case of serious tax evasion involving income of INR5m or more in a year.

Further, the Budget unveiled plans for a new dispute resolution committee. Taxpayers with taxable income up to INR5m (USD68,000) and with disputed liability of up to INR1m will be able to approach the committee.

With regard to indirect taxes, the Budget announced that India will phase out hundreds of customs duty exemptions, in a new duty structure to be introduced in October.

The Budget also announces … Read More »

India Announces Support Measures

Posted on April 2nd, by Global Tax Weekly in Government. No Comments

Faced with an unprecedented situation, and with economic and social conundrums the like of which haven’t been seen since World War II (if then), governments internationally have been obliged to fight on several fronts at once, attempting to ensure support and resources for their health systems, whilst seeking to bolster stuttering economies and suddenly impoverished populations, in the hopes of preventing short-term destitution and long-term hardship.

Moves in this area over the past week have included in India, where Prime Minister Narendra Modi on March 24 ordered the country’s population of 1.3 billion into lockdown for three weeks. However, in addition, the Indian authorities announced various tax measures to support businesses and individuals. These included that:

The deadline for FY18-19 income tax returns has been extended from March 31, 2020, to June 30, 2020.
The Aadhaar-PAN linking date is to be extended from … Read More »

Indian Budget Announced

Posted on August 12th, by Global Tax Weekly in Budgets. No Comments

At the start of August, the Indian authorities published in the country’s official Gazette the measures announced in the July 5 budget, which have since received Presidential Assent. Among the key measures contained in the budget were provisions to ensure that the scope of the lower 25 percent corporate income tax rate will be expanded to cover the vast majority of Indian businesses, with a figure of 99.3 percent having been mooted.

Previously, the lower 25 percent rate is levied on those businesses with turnover not exceeding INR2.5bn (USD36.5m), and on manufacturing firms. This threshold is being raised to INR4bn.

Other salient tax measures in the Budget, in addition to measures impacting individual taxpayers, included the launch of a new dispute resolution service to resolve legacy service tax and excise duty-related disputes; confirmation that there will be a single monthly GST return … Read More »

Indian Budget Released

Posted on July 15th, by Global Tax Weekly in Budgets. No Comments

The Indian Government announced in the recent Budget that the scope of the lower 25 percent corporate income tax rate would be expanded to cover 99.3 percent of Indian businesses.

Currently the lower 25 percent rate is levied on those businesses with turnover not exceeding INR2.5bn (USD36.5m), and on manufacturing firms. This threshold will be raised to INR4bn.

The Budget also confirmed a number of administrative simplifications, including the introduction of a single monthly GST return. The Budget also proposes to extend, until March 31, 2021, the exemption from capital gains tax on gains arising from the sale of a residential house where the capital is used to invest in a start-up. The Government said it would also relax the eligibility conditions.

For more information on this, and other topical international tax matters, please visit:

Indian Government Removes Ombudsmen

Posted on February 21st, by Global Tax Weekly in Compliance. No Comments

It’s not been a good time for taxpayers in many jurisdictions lately. India, for example, is infamous for its complex tax rules and capricious tax inspectors. It’s just the sort of place where you need a neutral authority standing in between taxpayers and the tax man to arbitrate disputes. Like an ombudsman. Except that the Indian Government has just decided to abolish its income tax ombudsmen service. Oh dear.

Apparently, according to the government, the ombudsman service is being shut down because it hasn’t achieved its objectives, and because taxpayers are increasingly turning to alternative forms of dispute resolution mechanism. That the ombudsman’s office has been effectively squeezed out by the competition probably tells you all you need to know about India’s tax system. Dispute resolution must be a lucrative market indeed!

For more information on this, and other topical international tax … Read More »

Indian GST Rate Changes Attract Little Notice

Posted on January 7th, by Global Tax Weekly in Sales Tax. No Comments

Tax is something that most people merely grin and bear, albeit through gritted teeth. But it’s sometimes much more exciting than that. Indeed, it can change the course of history. Think the Boston Tea Party or Magna Carta. America might still be ruled by Britain, and Britain ruled by kings and queens, or portly prince-regents with more interest in pies than the parliamentary process. All (or largely) because of tax.

In many countries, 2018 ended in an inferno of tax-motivated protests. Not quite revolutions, but fervent enough to change a government’s mind. The “gilet jaunes” demonstrations in France was the most widely-reported example. But the movement has seemingly inspired similar tax-motivated outcries as far afield as Canada and Taiwan. The streets of Jordan’s capital, Amman, have also reverberated to the sounds of anti-tax protests recently.

Tax cuts, on the other hand, never, … Read More »

Indian Budget Pleases Nobody

Posted on February 6th, by Global Tax Weekly in Budgets. No Comments

India’s 2018 Budget barely registered a blip of the excitement scale. But it is still worth mentioning for a number of reasons. Not least because Finance Minister Arun Jaitley has managed to upset pretty much everybody with some unpopular – some observers say misguided – measures. I thought it was in the politician’s DNA that, as a minimum, they at least attempt to please some of the people, some of time, so this could be considered something of a rate feat.

For a Government that has prioritized foreign investment and improving its “doing business” ratings, this is a strange Budget indeed. Investors have immediately seized upon the proposal to reintroduce a tax on long-term capital gains, which was replaced by a securities transactions tax back in 2004. However, the latter tax remains in place, increasing the prospect of cascading taxation for … Read More »


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