Taxation

A fine is a tax for doing something wrong. A tax is a fine for doing something right – Lowell Nussbaum

India has a multi tier tax system comprised of direct and indirect taxes, levied by central and state Governments. India has entered into double taxation avoidance agreements with countries around the world, including all major countries that may have trade interests with India. The advantages of investment in India can be maximized, or lost depending on the way the investment is structured, and business operations are planned. The practice area includes advising on:

  • Investments in India, direct and indirect taxation issues and comparative analysis of setting up the Indian subsidiary through tax efficient structures.
  • Service Tax, Customs and Excise duty, Income Tax, Sales Tax and Works Contract Tax.
  • Service Tax on diverse services and on payments made to the outsourcing units, and applicability on cross border transactions, exemption of Service Tax on export of services and re-structuring of the services agreements.
  • Excise and Customs duties applicable to assembly/manufacture from SKD products, structuring for continued abatements/tax credits pursuant to change in operations/activity, claim of refunds and conditions therefor, duty draw backs.
  • Applicability of withholding tax liability on equipment leases and capacities.
  • Assessments, proceedings and challenges to adverse orders of the tax departments.
  • International taxation issues, transfer pricing, tax incentives in India to export oriented units, double taxation avoidance treaties, offshore investment vehicles, permanent establishment and withholding tax implications. 
  • Tax implications on restructuring of agreements and external commercial borrowings.

Notable Representations

  • Four Tower, LLC, USA, advised on the possibility of foreign company having ‘significant economic presence’ in India under the Indian income tax laws, advise concerning training activity proposed and potential tax implications if a permanent establishment or PE in terms of the India-US Double Taxation Avoidance Agreement and advance rulings, indirect tax advice related to Goods and Services Tax implications on ‘Online Information Database Access and Retrieval’ (OIDAR) services. 
  • Kamonohashi Project on (a) direct taxes related to the Indo-Japan DTAA, and (b) indirect taxes such as GST, which may have an impact on their potential activities in India including with partner NGOs and consultant contracts.
  • Freud Communications Limited, advised on income tax implications in view of the Indian Income Tax Act read with DTAA between India and UK concerning the proposed arrangement with an Indian company for providing public relations services for such Indian company in UK. 
  • Autus Capital Mauritius Ltd, advised on tax issues with respect to its investments in India including an assessment on the benefits available to and restrictions imposed on foreign investors to access Indian financial markets through a Mauritian company and the taxation of the funds in India under the Indian Income Tax Act, 1961, read with the provisions of the India-Mauritius Tax Treaty including on capital gains, interest income, income from derivatives, dividends etc. 
  • Association of Unaided CBSE Schools, Madhya Pradesh, assisted in drafting a representation to be submitted with the Goods and Services Tax Council and Ministry of Finance for waiver/exemption on payment of goods and services tax on provision of sports and coaching to schools and educational institutions.
  • World Learning, USA concerning tax deductions applicable on severance payment to a foreign national employee. 
  • Takshila Educational Society, India in obtaining tax registrations/exemptions for public charitable trusts in Delhi. 
  • Usha Breco, India concerning customs duty and GST payable on import of ropeway equipment and tax structuring. 
  • The Estate, India concerning luxury tax and GST impact upon conversion of a bed and breakfast. 
  • Emerald Heights School on tax implications of services arrangements with group/associated entities and in representation to the GST Council to categorise certain services as exempt. 
  • Audalis, Germany concerning direct and indirect tax impact of acquisition of assets by a foreign company in India.
  • CPA Global India in Review of the wage structure including components related to reimbursement of fuel and driver expenses and car lease policy and advice on the extent of income tax benefits which may be availed in view of specific provisions and limitations.