Global

Details

  • Service: Tax, International Corporate Tax, Global Indirect Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 8/9/2012

India - Service tax on directors’ services, institutional investor’s gain 

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):
  • Services provided by board directors subject to liability under reverse charge mechanism: Beginning July 2012, a “negative list” regime (used in identifying services subject to taxation) replaced the “positive list” regime for service tax purposes. With this change, many services—including those provided by non-executive directors sitting on company boards—became subject to the service tax. The tax authorities issued guidance on 7 August 2012 implementing the reverse charge mechanism on services provided by company directors.

    Read an August 2012 report [PDF 194 KB]


  • Gain on foreign institutional investor’s sale of government securities is capital gain, not interest, and thus is exempt under a treaty provision: The Bombay High Court held that (1) interest on government securities accrues only on the date specified in the instrument (i.e., coupon date) and not on any other date; and (2) gain arising on sale of government securities by foreign institutional investor is capital gains, not interest. Accordingly, the taxpayer could claim an exemption in respect of the capital gains provision of the India- Cyprus income tax treaty.

    The case is: Credit Suisse First Boston (Cyprus) Ltd. Read an August 2012 report [PDF 213 KB]



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