Monthly Archives: January 2014

  • No TDS on Service Tax element – CBDT clarifies

    January 17 2014

    CBDT has issued a circular clarifying that wherever in terms of the agreement/contract between the payer and the payee, the service tax component comprised in the amount payable to a resident is indicated separately, tax shall be deducted at source under Chapter XVII-B of the Act on the amount paid/payable without including such service tax component.


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  • Divisibility of an EPC contract into Off-Shore & On-Shore – whether still ‘looked at’!!! by courts?

    January 13 2014

    After the Vodafone judgement a number of Advance Authority Rulings (AAR) were echoing the concept of "looking at" the consortium agreements thereby disregarding the dissecting approach, when it came to the taxability of an Engineering, Procurement & Construction contract (EPC). AAR disregarded the concept of divisibility and consequently sought to tax such consortium as an Association of Person (AOP). 

    However, in a recent ruling of Uttrakhand High Court in the case of Samsung Heavy Industries Co. Ltd vs. DIT has held that Even in a composite contract, Income Tax Department can not assess off-shore profits without showing how it is attributable to the Permanent Establishment in India.

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