• Service: Tax, Global Indirect Tax, International Executive Services, International Tax
  • Type: Regulatory update
  • Date: 9/4/2013

India - No service tax on exported marketing services 

September 4: The KPMG member firm in India prepared reports on the following developments (read the August and September 2013 reports by clicking on the hyperlinks provided below):
  • Support services provided to foreign affiliates qualify as exports, not subject to service tax - India’s Authority for Advance Ruling (Central Excise, Customs and Service tax) concluded that marketing and related support services provided by an Indian company to its affiliate entities located outside India (with respect to goods supplied by the affiliate entities to customers in India) qualify as exports and, hence, are not subject to service tax.

    The case is: Tandus Flooring India Private Ltd. Read a September 2013 report [PDF 454 KB]

  • Depreciation not allowed on tenancy rights - The Mumbai Bench of the Income-tax Appellate Tribunal held that tenancy rights are not commercial rights similar to know-how, patents, copyrights, etc., and therefore are not allowed depreciation.

    The case is: Dabur India Ltd. Read a September 2013 report [PDF 443 KB]

  • Merely filing a return not basis for AAR consideration unless the issue was raised in the filed return - The Authority for Advance Ruling concluded that the mere filing of an income tax return before an application for an advance ruling does not necessarily mean that the question raised in the application was already pending before the tax authority. Rather, the mere filing of the return is not sufficient, unless the issue is raised in the application for the advance ruling was an issue in the return filed.

    The case is: Hyosung Corporation. Read a September 2013 report [PDF 398 KB]

  • Conversion of leasehold property to freehold was an improvement of the property’s title, but did not affect holding period for classifying the capital asset as long term or short term - The Allahabad High Court held that the conversion of leasehold property rights to freehold property was an improvement of the property’s title; however, the title conversion did not affect a determination of the holding period for classifying the capital asset as either long-term or short-term asset.

    The case is: Rama Rani Kalia. Read an August 2013 report [PDF 441 KB]

  • Shares held as stock-in-trade - The Mumbai Bench of the Income-tax Appellate Tribunal held that a disallowance under section 14A of the Income-tax Act, 1961 and Rule 8D of the Income-tax Rules, 1962 (concerning tax-exempt dividend income) applies to shares held as stock-in-trade.

    The case is: Damani Estates & Finance Pvt Ltd. Read an August 2013 report [PDF 452 KB]

©2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

The KPMG logo and name are trademarks of KPMG International.

KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.

The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Direct comments, including requests for subscriptions, to
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.


Share this

Share this


Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)

Already a Subscriber? Login

Not a member? Subscribe now