Global

Details

  • Service: Tax, International Corporate Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 3/6/2013

India - Service tax, fees for technical services, bonus payments 

March 6: The KPMG member firm in India has prepared reports on the following developments (read the February / March 2013 reports by clicking on the hyperlinks provided below):
  • Service tax has no element of profit, and not included in the service provider’s total receipts when computing presumptive income: The Mumbai Bench of the Income-tax Appellate Tribunal held that India’s service tax is a statutory liability that does not involve any element of profit and that a service provider (a South Korean company engaged in maritime shipping) is merely collecting the amount of service tax from its customers on behalf of the government. Accordingly, the service tax is not included in the service provider’s total receipts for purpose of determining the amount of presumptive income under section 44B of the Income-tax Act, 1961.

    The case is: Hanjin Shipping Company Ltd. Read a March 2013 report [PDF 192 KB]


  • Payments for testing with automated machinery, not involving human intervention, are not “fees for technical services”: The Mumbai Bench of the Income-Tax Appellate Tribunal held that payments made to laboratories for tests using highly sophisticated technology without any human intervention for certification purposes are not “fees for technical services” under section 9(1)(vii) of the Income Tax Act, 1961. According to the tribunal, any technology or machine developed by human beings and operating automatically without much human interface or intervention cannot be deemed to be the rendering of “technical services” using human skills. Also, because the certificates were provided by human beings does not render these services as having been provided by human skills.

    The case is Siemens Ltd. Read a February 2013 report [PDF 209 KB]


  • Provision for bonus not added back to “book profit” for the minimum alternative tax computation: The Delhi High Court held that a bonus made in accordance with the Payment of Bonus Act, 1965, is not added back to the taxpayer’s “book profit” for purpose of computing the minimum alternate tax (MAT) under the Income-tax Act, 1961.

    The case is: O.B.C. Read a February 2013 report [PDF 193 KB]


  • Changes to tax forms: India’s Central Board of Direct Taxes issued guidance amending the Income-tax Rules, 1962, concerning forms known as the “statement of deduction of tax” and the “statement of collection of tax” and amending the requirement to furnish a “certificate from an accountant.”

    Read a March 2013 report [PDF 205 KB]


©2013 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 us-kpmgwnt@kpmg.com.
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.
 

Subscribe

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


Already a Subscriber? Login


Not a member? Subscribe now

Contact us

TaxNewsFlash by region


TaxNewsFlash home

TaxNewsFlash-Asia Pacific by country


TaxNewsFlash-Asia Pacific home