India: Crude oil installation facility; PE’s profits in India

India: Crude oil installation facility; PE’s profits

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

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  • Payments for crude oil “single point mooring” (offshore) installation not taxable as royalty: The Delhi High Court held that consideration received for offshore construction and installation of “single point mooring”—including anchor chains and floating and subsea hoses to enable unloading of crude oil from “very large” crude oil carriers to meet the crude oil requirement of taxpayer’s refineries located in the eastern part of India—is not taxable as either a royalty or “fees for technical services” in India. The case is: Technip Singapore Pte. Ltd. Read a June 2016 report [PDF 350 KB]
  • Net global profits attributed to Indian permanent establishment: The Delhi Bench of the Income-tax Appellate Tribunal held that almost all sales functions—including marketing, banking, and after-sales service—were conducted by the taxpayer’s permanent establishment (PE) in India; and therefore, 35% of the net global profits are attributed to the PE in India in respect of hardware and software supplied to Indian customers. The case is: ZTE Corporation. Read a June 2016 report [PDF 344 KB]
  • FAQs on newly introduced tax withholding provisions: Existing provisions require tax withholding (collection) at source and impose a requirement on the seller of certain goods to withhold and collect tax at the specified rates from the buyer of the goods.  Given changes made by the Finance Act, 2016, the Central Board of Direct Taxes issued a list of “frequently asked questions” (FAQs) to clarify the rules. Read a June 2016 report [PDF 291 KB]
  • Levy and collection of cess: With the introduction of Krishi Kalyan Cess (KKC), the Ministry of Finance has issued guidance to give effect to the levy and collection of KKC. Read a June 2016 report [PDF 268 KB]

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