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India Quarterly August-October 2011

  • Walking before running

  • India dismisses Netherlands’ call to settle Vodafone case

  • India’s Supreme Court hears E*Trade Mauritius challenge

  • ITAT rejects low turnover and segmented results as comparables

  • India sends indirect share transfer warning

  • Use of experts is “positive development”, says Indian panel

  • Secondment arrangements liable to Indian tax

    Daksha Baxi and Surajkumar Shetty of Khaitan & Co analyse a decision from the Authority for Advance Rulings which ruled that the cross-charge of salary cost under a secondment arrangement represent fees for included services and so warrants withholding tax.

  • India debates changing course on APAs

    The Indian government is rumoured to have changed tack on its structuring of the upcoming advance pricing arrangement (APA) programme. Taxpayers expected a unilateral APA to be incorporated into the Direct Taxes Code in 2012 but officials could be bending to arguments from lobbyists that this way of establishing certainty about transfer pricing would be arbitrary. Sophie Ashley takes a fresh look at the APA process and considers the pros and cons to unilateral and bilateral APAs.

  • A red flag for black money

    The Supreme Court of India is getting serious about fighting tax abuse. Erin Kelechava investigates why the court is so concerned that the government has not been working quickly enough to combat the problem, despite new initiatives, legislation and international agreements.

  • Top tax disputes advisers offer certainty

    With fears that the implementation of the Direct Taxes Code next year will lead to an unprecedented number of tax disputes, Matthew Gilleard speaks to the country’s leading tax disputes advisers to discuss the issues they are facing and how they overcome them.

  • Why India is not ready for the OECD

    The OECD and India have been cooperating since 1995 and became an official observer in 2008. But in June the two signed an agreement to broaden tax cooperation over the next three years. Many see this as the final stage before becoming a full member. Jack Grocott looks at India’s tax system to see why it is not ready to take the next step and join the OECD.

  • Tax policy under scrutiny as India prepares for reform

    As India prepares for the most substantial shake-up to its tax system in 50 years, Salman Shaheen investigates the progress of tax policy there and why the US Secretary of State thinks it needs to be accelerated with the aid of the OECD.

  • Redefining frontiers of tax controversy

    The last couple of years have witnessed a radical change in the Indian tax controversy landscape. Issues, which one would have thought are beyond the horizon a few years back, now occupy the most prominent space in the Indian tax controversy expanse. One such recent emergence is that of taxation of offshore transfer of shares of an overseas company. Arun Chhabra & Nidhi Gupta of Walker, Chandiok & Co investigate.

  • Transfer pricing woes for pharmaceutical industry

    A failure on the part of Indian pharmaceutical companies to keep their pricing policies in sync with the arm’s-length standard is being used by the authorities for making transfer pricing adjustments in the sector. Milind Kothari and Gaurav Shah of MZS & Associates highlight the transfer pricing traps for the industry, with the aid of recent case law.

  • Investment on the rise as India adjusts LLP rules

    In India, businesses traditionally operate as incorporated companies, sole proprietorships and general partnerships. Each of these business structures has its own advantages and shortcomings and is subject to different regulatory and tax regimes. But as Pinakin Desai and Praful Poladia of Ernst & Young point out, with the government recently allowing foreign investment in limited liability partnerships (LLP), the LLP is now a attractive tool for doing business in India.

  • How to avoid comparing the incomparable

    K Swaminathan of Lakshmi Kumaran & Sridharan asks the question, through the use of a case study, of what if an Indian company expanding its operations outside India wishes to license its trademark for no fee while at the same time analysing the associated risks and benefits.

  • How transfer pricing can manage the GAAR

    Rohan Phatarphekar of KPMG and Akash Arora of BSR & Co explain how taxpayers can ring-fence their tax liabilities under India’s pending general anti-avoidance rules (GAAR) by the effective use of various transfer pricing tools.

  • Industry focus: Oil & gas

    In the second of a regular series, Rahul Garg, Shailesh Monani, Deepak Mahurkar and Chandresh Bhimani of PwC highlight the key challenges taxpayers face in key Indian industries. In this issue, the authors analyse the tax hurdles and opportunities in the oil and gas sector.

  • PE challenges for Indian outsourcing transactions

    Akil Hirani and Ravishankar Raghavan of Majmudar & Co provide case studies on how to utilise permanent establishments for outsourcing transactions in India and how to avoid the associated risks.

International Correspondents