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India: Telecom license-related fees not capital asset

India: Telecom license-related fees not capital asset

The KPMG member firm in India has prepared reports about the following tax developments (read more at the hyperlinks provided below).


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  • Registration not required, location where goods are imported: The Authority for Advance Ruling, Maharashtra found that absent any establishment or place of operation, separate registration is not required in the state where goods are imported for subsequent sale. The case is: Sonkamal Enterprises Private Limited. Read a December 2018 report [PDF 543 KB]

  • No penalty on account of human error: The High Court of Kerala held that human error, detectable by the “naked eye,” does not warrant a penalty. The case is: M/s Rai Prexim India Pvt. Ltd. Read a December 2018 report [PDF 687 KB]

  • Telecom license-related fee: The Delhi Bench of the Income-tax Appellate Tribunal held that the right to set off the one-time non-refundable entry fee against the upfront fee payable for allotment of telecom licenses is not a “capital asset” and was not taxable as a capital gain. The case is: Telenor (India) Communications Pvt Ltd. Read a December 2018 report [PDF 771 KB]

  • Tax treatment on conversion of private limited company into LLP: The Mumbai Tribunal in a case concerning the tax treatment of the conversion of a private limited company into a limited liability partnership held that because certain conditions were not satisfied, the authorities had correctly disallowed carryforward losses. The case is: Celerity Power LLP. Read a December 2018 report [PDF 640 KB]

  • Extension of certificate of coverage, social security agreements: The Employees’ Provident Fund Organisation issued a circular concerning an extension of a certificate of coverage beyond the period stipulated by the applicable social security agreements. Read a December 2018 report [PDF 727 KB]

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