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India Quarterly November 2011-January 2012

  • The courts need to be consistent

  • Vodafone involved in yet another Indian dispute

  • Indian tribunal rules that software payments are not subject to tax

  • Indian Revenue opportunism rules out multiple year data

  • Why paying for the best lawyers prevents long PE battles in India

  • Indian authorities have no right to question commercial wisdom of taxpayer

  • Problems facing the high-tech industry

    In September foreign IT companies were attacked by the Indian media for the low profits they are booking in the country, compared to domestic firms. Practitioners warn, though, that it is not as cut-and-dry as it seems. Sophie Ashley speaks to the high-tech industry to find out more about the problems they are facing and how they operate efficiently in India.

  • How India is dealing with the problem of tax evasion

    Tax evasion in India is an intensely politicised matter, and disputes such as that surrounding Hyundai Motor India Limited, which faces evasion charges amounting to Rs266 crore ($59 million), indicate that the issue is still as rife as ever. But recent initiatives such as the revised India-Switzerland tax treaty could mark the first significant steps towards reining the problem in. Matthew Gilleard investigates.

  • India’s infant environmental taxes slowly growing

    India’s environmental tax system is still young and undeveloped, but Salman Shaheen looks ahead to see what the future might bring, what it will mean for taxpayers and how best to use tax policy to ensure sustainable growth.

  • DTC, GAAR and planning dominate forum

    Taxpayers, officials and advisers came together on September 6 & 7 to discuss all aspects of India’s tax system at International Tax Review’s second annual India Tax Forum in Delhi.

  • Top directors offer advice on how to manage India

    Navigating India’s tax system is not an easy task. With two new tax laws expected in 2012 and growing aggression from officials, Jack Grocott got three of the country’s leading tax directors to share their knowledge and advice on how best to manage Indian tax.

  • How to prepare for the DTC

    Opinions are divided on whether the Direct Taxes Code (DTC) will be implemented on April 1 2012 or whether it will be ripped up and the least controversial aspects introduced quietly in the Finance Bill. One thing is for sure, change is on its way. Jack Grocott speaks to tax professionals to ask for their advice on how to prepare for the change.

  • Indians still hazy on the branch profit tax provision

    One of the least discussed proposed provisions in India’s Direct Taxes Code is the branch profits tax. The new law proposes to tax profits of the branches of the foreign companies carrying on business in India. Ajit Korde, Commissioner of Income Tax, Indian Revenue Service, discusses some of the aspects of the tax and argues that it should be higher up on taxpayer’s agendas.

  • Court springs PE debate back into life

    In two separate judgments Delhi High Court ruled on the tax liability of Rolls Royce and Rolls Royce Singapore due to their operations in India. Common issue in both the matters was exposure to a permanent establishment (PE) in India and quantum of profits to be attributed to operations carried out by the PE in India. Sunil Jain of J Sagar & Associates investigates.

  • Redefining place of effective management

    India’s domestic tax law follows residency-based taxation rather than source-based taxation. For an Indian tax resident, worldwide income is taxable in India. The residential status thus impacts the scope of income liable to be taxed in India. K Subramanian and S Anantha Padmanabhan of Deloitte analyse the challenges taxpayers will face once the place of effective management concept is introduced.

  • Cross-border taxation and TP in the shipping industry

    Milind Kothari and Gaurav Shah of MZS & Associates analyse, with the aid of Indian case law, the challenges taxpayers in the shipping industry face from a cross-border tax and transfer pricing perspective.

  • Industry focus: Entertainment & media

    In the third of a regular series, Sandeep Ladda and Milan Shah 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 entertainment and media sector.

  • Tax exempt M&A may not be tax free

    Business reorganisation and restructuring in M&A activity has become an important and necessary tool for business strategy in India. Daksha Baxi and Vinita Krishnan of Khaitan & Co investigate the challenges taxpayers will face in light new provisions of Section 56 of the Income Tax Act, 1961.

  • Concept of negative list for service tax introduced

    The recently released concept paper on taxation of services based on the Ministry of Finance’s negative list concept has evoked mixed reactions from industry. This is an important development and while industry has lauded the move towards a comprehensive and simplified service tax regime, Harishanker Subramaniam of Ernst & Young explains that there are strong views on the timing of its implementation and its impact on certain sectors.

  • A round-up of the latest transfer pricing rulings

    Vispi Patel and Rajesh Athavale of Vispi T Patel & Associates explain how recent judicial rulings throw light on different aspects of transfer pricing and offer guidelines to taxpayers on the way to mitigate transfer pricing risk in India.

  • Taxability of IP rights in India

    Intellectual property (IP) is one of the most debated tax topics in India. The increased examination and monitoring of IP transactions has resulted is the problem of double taxation. Shivam Mehta and Kapil Sharma of Lakshmi Kumaran & Sridharan scrutinise the applicability of service tax on IP transactions and highlight the issues regarding multiple taxation of IP under various statutes prevailing in India.

  • Beneficial ownership grabs attention

    Arun Chhabra and Nidhi Gupta of Walker, Chandiok & Co analyse the concept of beneficial ownership and discuss the implications, meaning, judicial precedents that are relevant to Indian taxpayers. The pair also dissect the recent OECD discussion paper on the topic.

International Correspondents