Sale of third-party products would be characterised as income from `business profits' and not fee for technical services.
The Mumbai Income Tax Appellate Tribunal in a recent decision concerning eBay International AG ruled that the revenue of the taxpayer from sale of third-party products on its Web site would be characterised as income from `business profits' and not fee for technical services, as the taxpayer did not play any role in effecting the sales apart from displaying the products. Further, the Tribunal held that the dependent agents deployed for support services in India did not create a Permanent Establishment, or PE, for the taxpayer under the `Agency PE rule', as they had no authority to conclude contracts on behalf of the taxpayer. In the absence of a PE such `business profits' were not taxable in India.
Don't repeat the question, Taxman!
The Delhi High Court in a recent decision concerning Rio Tinto India Pvt Ltd held that certain fundamental issues such as the date of commencement of a business that has attained finality in one year, cannot be reopened. The Court held that once the tax officer has assessed the income of a taxpayer in a particular assessment year, it would be unfair to make the taxpayer establish its date of commencement for every successive assessment year. The Court observed that the Revenue cannot influence its decision on the date of commencement of the business based on the fact that the income of the taxpayer over the successive assessment years has been meagre in comparison to its expenditure.
FAQs on advance pricing agreements
The Advance Pricing Agreements programme introduced by Finance Act, 2012 came into effect from July 1, 2012. Further, the Central Board of Direct Taxes announced the APA guidelines on August 31. Based on consultations and feedback, the CBDT is likely to issue more clarifications. The guidelines are likely to be in an FAQ format and expected to be released in the coming weeks.
PF relief for international workers
The Ministry of Labour and Employment recently issued a notification amending the Provident Fund scheme as applicable to `International Workers':
International Worker covered under a social security agreement entered between India and another country can withdraw contributions from the Provident Fund on termination of employment with Indian employer.
International Worker can withdraw from the Provident Fund either directly or through the employer.
The amendment will benefit foreign nationals who have contributed to the Provident Fund in India before the agreement between their home country and India came into force.
However, those from countries with which India does not have a social security agreement will still be eligible to withdraw from the Provident Fund after reaching the age of 58.
The Mumbai Income Tax Appellate Tribunal in a recent decision concerning eBay International AG ruled that the revenue of the taxpayer from sale of third-party products on its Web site would be characterised as income from `business profits' and not fee for technical services, as the taxpayer did not play any role in effecting the sales apart from displaying the products. Further, the Tribunal held that the dependent agents deployed for support services in India did not create a Permanent Establishment, or PE, for the taxpayer under the `Agency PE rule', as they had no authority to conclude contracts on behalf of the taxpayer. In the absence of a PE such `business profits' were not taxable in India.
Don't repeat the question, Taxman!
The Delhi High Court in a recent decision concerning Rio Tinto India Pvt Ltd held that certain fundamental issues such as the date of commencement of a business that has attained finality in one year, cannot be reopened. The Court held that once the tax officer has assessed the income of a taxpayer in a particular assessment year, it would be unfair to make the taxpayer establish its date of commencement for every successive assessment year. The Court observed that the Revenue cannot influence its decision on the date of commencement of the business based on the fact that the income of the taxpayer over the successive assessment years has been meagre in comparison to its expenditure.
FAQs on advance pricing agreements
The Advance Pricing Agreements programme introduced by Finance Act, 2012 came into effect from July 1, 2012. Further, the Central Board of Direct Taxes announced the APA guidelines on August 31. Based on consultations and feedback, the CBDT is likely to issue more clarifications. The guidelines are likely to be in an FAQ format and expected to be released in the coming weeks.
PF relief for international workers
The Ministry of Labour and Employment recently issued a notification amending the Provident Fund scheme as applicable to `International Workers':
International Worker covered under a social security agreement entered between India and another country can withdraw contributions from the Provident Fund on termination of employment with Indian employer.
International Worker can withdraw from the Provident Fund either directly or through the employer.
The amendment will benefit foreign nationals who have contributed to the Provident Fund in India before the agreement between their home country and India came into force.
However, those from countries with which India does not have a social security agreement will still be eligible to withdraw from the Provident Fund after reaching the age of 58.
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