Global

Details

  • Service: Tax, International Corporate Tax, Global Indirect Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 6/21/2012

India - Completed sales, dependent agent PE, and CENVAT changes 

June 21:  The KPMG member firm in India has prepared reports on the following developments (to read these June 2012 reports, click on the topic below):

Sale completed only when deed is registered; transactions with “sister concern” not a sham because no evidence of tax evasion or not at arm's length: The Delhi Bench of the Income-tax Appellate Tribunal held that: (1) a sale made by the taxpayer is deemed to be completed only when the conveyance deed is registered in favour of the purchasers, and that merely receipt of an advance does not fully satisfy a contract; and (2) transactions with a “sister concern” are not to be treated as sham transactions unless there is evidence showing that the transactions were collusive, for tax evasion purposes, or not made at arm’s length.


The case is: Malibu Estates (P) Ltd. Read the June 2012 report [PDF 206 KB]


Indian agents of Mauritian company not “dependent agent PE” under India-Mauritius tax treaty; they neither had authority to conclude contracts nor habitually exercised such authority: The Mumbai Bench of the Income-tax Appellate Tribunal held that the Indian agents of a Mauritian company do not create “dependent agent permanent establishment” (PE) under the India-Mauritius income tax treaty because they neither had authority to conclude contracts nor had they habitually exercised such authority. The tribunal also held that even if the taxpayer were found to be a dependent agent PE in India, since payment to agents was at arm’s length, there would be no need to attribute further profits to the PE in India.


The case is: B4U International Holdings Ltd. Read the June 2012 report [PDF 167KB]


Changes to CENVAT refunds: New rules under Union Budget 2012 affect the CENVAT refund program available for exporter of goods / services.


Read the June 2012 report [PDF 191 KB]




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