India: GST update; merger of foreign company | KPMG Global
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India: GST update; merger of foreign company with Indian company

India: GST update; merger of foreign company

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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  • Government actions to implement goods and services tax (GST) still pending: The Central GST Bill, the Integrated GST Bill, Union-Territory GST Bill, and the GST (Compensation to States) Bill, have received assent from the president of India to become “acts of Parliament,” thereby making implementation of GST in India by 1 July 2017 possible. However, the government still needs to notify further items, products, or taxpayers covered at more than 80 places in the acts. Read an April 2017 report [PDF 555 KB] 
  • Rules for merger, amalgamation of foreign company with Indian company: The government of India has released guidance providing rules with respect to mergers and amalgamations between a company registered under the Companies Act and a foreign company (and vice versa). There is also guidance issued in conjunction with the Reserve Bank of India (RBI) to amend the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. Read an April 2017 report [PDF 541 KB] 
  • Disallowance of expenses related to shares held as stock-in-trade: The Kolkata Bench of the Income-tax Appellate Tribunal held that the rules for expense disallowance under section 14A of the Income-tax Act, 1961 apply to shares held as stock-in-trade, but that such expense disallowance is limited to those shares that have yielded dividend income in the year at issue. The case is: Kalyani Barter (P) Ltd. Read an April 2017 report [PDF 364 KB]
  • Income tax withheld outside India disallowed as deduction under section 37(1): The Ahmedabad Bench of the Income-tax Appellate Tribunal held that income tax that is withheld (“deducted”) outside India is not allowed as a deduction under section 37(1) of the Income-tax Act, 1961 because the amount is covered under the “disabling provisions” of section 40(a)(ii). The case is: Elitecore Technologies Private Limited. Read an April 2017 report [PDF 369 KB]

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