India: Interest on tax refunds; aircraft landing rights; withholding tax

India: Tax refunds; aircraft; withholding tax

The KPMG member firm in India has prepared reports concerning the following judicial developments (read more at the hyperlinks provided below):


Related content

Interest on tax refund is taxable as “business income” under the India-UK tax treaty; effectively connected with a PE in India: The Uttarakhand High Court held that the interest paid on an income tax refund is taxable as "business income” under provisions of the India-United Kingdom income tax treaty because the debt-claim, for which the interest was paid, was effectively connected with a permanent establishment in India. The case is: B.J. Services Company Middle East Ltd.


Landing and parking charges incurred by international airlines not “rent” for purposes of withholding tax at source: The Supreme Court of India held that amounts paid for landing and parking aircraft, by international airlines, is not to be treated as “rent” within the meaning of section 194-I of the Income-tax Act, 1961 because the amounts paid by the airlines are not for “use of land” but are instead for the use of various other facilities and services. The case is: Japan Airlines Co. Ltd.


Tax withheld under wrong provision, disallowed: The Kerala High Court held that if tax is to be withheld (or “deducted” as referred to in India) under section 194J but is actually withheld under section 194C, disallowance provisions of section 40(a)(ia) still apply.The case is: P V S Memorial Hospital Ltd.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Request for proposal



KPMG's new digital platform

KPMG International has created a state of the art digital platform that enhances your experience, optimized to discover new and related content.