India: Minimum alternative tax, debt forgiveness and foreign tax credits

India: Minimum alternative tax, debt forgiveness

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

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  • Transfer of a unit is not taxable as slump sale: The Kolkata Bench of the Income-tax Appellate Tribunal held that because (1) consideration in the sales agreement was split between identified moveable and immoveable assets and (2) the sales agreement did not include liabilities, receivables, stock, and other current assets, the sale of the tea estate would be taxed as an itemised sale, not as a “slump sale.”  The case is: Tongani Tea Co. Ltd. Read a November 2015 report [PDF 341 KB]
  • Minimum alternative taxation (MAT), debt forgiveness: The Bangalore Bench of the Income-tax Appellate Tribunal held that remission of a liability under a one-time settlement credited to the profit and loss account is subject to India’s MAT. The case is: B & B Infotech Ltd. Read a November 2015 report [PDF 342 KB]
  • Foreign tax credit: The Bangalore Bench of the Income-tax Appellate Tribunal held that the credit for taxes paid in a foreign country is available as a credit against the MAT liability. The case is: Subex Technology Ltd. Read a November 2015 report [PDF 316 KB]
  • FAQs on Swachh Bharat Cess (service tax): Following the introduction of the Swachh Bharat Cess (service tax) imposed on all taxable services at a rate of 0.5%, the Central Board of Excise and Customs issued a list of frequently asked questions (FAQs) to clarify various aspects relating to the levy and collection of the tax. Read a November 2015 report [PDF 294 KB]
  • Foreign investment policy reforms: The Department of Industrial Policy and Promotion announced changes to India’s foreign direct-investment policy. Among the changes, the measures are intended to permit more foreign investments in certain sectors. Read a November 2015 report [PDF 445 KB] 

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