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India: GST on reimbursements to liaison office; Protocol with Sweden

India: GST on reimbursements to liaison office

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


Related content

  • Services supplied to associate concern based outside India are taxable services: The Authority for Advance Rulings (AAR) found that services supplied to an associate concern (based outside India) are taxable services and subject to goods and services tax (GST). Read a July 2018 report [PDF 721 KB]
  • Amended form for tax audit report: The Central Board of Direct Taxes announced an amended form for reporting tax audits—Form 3CD, Tax Audit Report—as required to be certified by an auditor. The changes will be effective 20 August 2018. Read a July 2018 report [PDF 660 KB] 
  • No GST for reimbursed expenses, salary by foreign head office remitted to India liaison office: The AAR concluded that a liaison office in India did not provide consultancy or other services, either directly or indirectly or for consideration, to the foreign head office. No commissions or fees were charged and no remuneration was received, and no income was earned by the liaison office in India for the liaison activities and services that it provided. The AAR ruled that the liaison office did not have a source of income and was solely dependent on the head office for all its expenses. Thus, the AAR found that the head office and the liaison office could not be treated as separate persons for the purpose of a GST levy. Read a July 2018 report [PDF 640 KB]
  • LLP and Indian company can amalgamate: The Chennai Bench of the National Company Law Tribunal held that a limited liability partnership (LLP) and an Indian company could amalgamate under provisions of Indian law including the Companies Act, 2013. Read a July 2018 report [PDF 724 KB]
  • Benefits and limitations of Protocol apply to tax treaty: The Delhi Bench of the Income-tax Appellate Tribunal—addressing applicability of a “most favoured nation” clause of a Protocol to the India-Sweden income tax treaty—observed that the Protocol must be considered to be part of the underlying tax treaty. Accordingly, if a particular benefit is being conferred, expanded or reduced by the Protocol (one that was missing from the tax treaty), then the provisions of the Protocol apply. A Protocol is not a document independent of the tax treaty, but must be considered as an addendum. In the case before the tribunal, because the new India-Sweden income tax treaty and Protocol were not considered by the Assessing Officer, the case was returned for a fresh adjudication. The case is: Ericsson Telephone Corporation India AB. Read a July 2018 report [PDF 733 KB]


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