• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 9/26/2013

India - Subsidiary’s subsidy, received from holding company, not taxable  

September 26: The KPMG member firm in India prepared reports on the following developments (read the September 2013 reports by clicking on the hyperlinks provided below):
  • Subsidy received by subsidiary, from holding company, to recoup losses not “revenue” and not taxable - The Delhi High Court held that subsidy that a subsidiary received from a parent company, to recoup the losses of subsidiary, is not in the nature of revenue, and thus is not taxable income under the Income-tax Act, 1961.

    The case is: Handicraft and Handlooms Export Corpn of India Ltd. Read a September 2013 report [PDF 401 KB]

  • Provident fund contributions liability for "canteen allowances" - The Delhi High Court held that "canteen allowances" are to be treated as a part of "basic wages" under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, and accordingly, such allowances are subject to provident fund contributions.

    The case is: Whirlpool of India Limited v. Regional Provident fund Commissioner. Read a September 2013 report [PDF 439 KB]

  • Committee report on tax and regulatory reform - A Ministry of Corporate Affairs committee, following a study or India's regulatory framework, issued a report recommending: (1) legal reforms; (2) architecture of the regulatory space; (3) measures to boost efficacy on the regulatory process; (4) improvement of the business environment for micro, small, and medium enterprises; and (5) issues to be addressed at the state level.

    Read a September 2013 report [PDF 436 KB]

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