Global

Details

  • Service: Tax, International Corporate Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 8/10/2012

India - Jurisdiction to challenge AAR rulings; head office R&D 

August 9:  The KPMG member firm in India has prepared reports on the following developments (read these August 2012 reports, by clicking on the hyperlinks provided below):

  • Supreme Court held that a taxpayer’s appeal of an AAR ruling is to be filed with High Court: The Supreme Court of India held that the Authority for Advance Rulings (AAR) is an Income-tax Appellate Tribunal under the Constitution of India. The taxpayer (a U.S. company) established a liaison office in India; the AAR, however, determined that the taxpayer had business activities subject to tax in India. The taxpayer filed a “special leave petition” before the Supreme Court, challenging the AAR’s ruling. The Supreme Court concluded that a challenge to a ruling of the AAR must be filed with the High Court—not the Supreme Court.

    The case is: Columbia Sportswear Co. Read an August 2012 report [PDF 206 KB]


  • Laboratory R&D expenditure of foreign head office, allocated to Indian branch, is fully allowable: The Mumbai Bench of the Income-tax Appellate Tribunal held that the a laboratory expenditure incurred by the taxpayer’s head office for research and development (R&D) and allocated to its Indian branch, is fully allowable because it did not include any executive or general administration expenditure.

    The case is: John Wyeth & Brother Ltd. Read an August 2012 report [PDF 203 KB]


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