Global

Details

  • Service: Tax, International Corporate Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 12/28/2012

India - Withholding tax, payments for preventive maintenance services 

December 28: The KPMG member firm in India has prepared reports on the following developments (read the December 2012 reports by clicking on the hyperlinks provided below):
  • No disallowance of withheld tax when incorrect amount is withheld (deducted): The Calcutta High Court affirmed the findings of the Income-tax Appellate Tribunal that a disallowance of withholding tax (tax deducted at source) is not appropriate under section 40(a)(ia) of the Income-tax Act, 1961, when there is a short -withholding (under-withholding) of tax because of the taxpayer’s application of the wrong tax provisions.

    The case is: S. K. Tekriwal. Read a December 2012 report [PDF 192 KB]


  • Amounts paid for technical assistance for preventive maintenance services are “fees for technical services” and not simply repair services: The Bangalore Bench of the Income-tax Appellate Tribunal held that repair services and related technical assistance for preventive maintenance are treated as “fees for technical services” because such services are not mere repairs but are towards preventive maintenance. Therefore, the taxpayer must withhold tax from these payments.

    The case is: Bosch Ltd. Read a December 2012 report [PDF 216 KB]



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