SUM PAID TO UNITED STATE OF AMERICA BASED COMPANY

SUM PAID TO UNITED STATE OF AMERICA BASED COMPANY . TO REVIEW DESIGN OF CRANES COULD BE ‘FTS’ IF MAJOR CHANGES WERE SUGGESTED IN ITS DESIGN

23Gujarat Pipavav Port Ltd. v. ITO (International Taxation), [Mumbai ITAT] ITA No. 7877 of 2010, Date of Decision: August 31, 2015

FACTS OF THE CASE

The assessee is a resident Indian Company in terms of section 6 of the Act and is in the business of developing, constructing, operating and maintaining the port in Gujarat. The assessee had entered into a contract for purchase of cranes from M/s ZPMC, China. These cranes were supposed to be manufactured in China itself and on completion, ought to be imported in India. The assessee engaged M/s Liftech Consultants Inc., a company registered in USA, USA tax resident for review of design of the cranes which were to be supplied by the Chinese concern M/s ZPMC. The assessee made payments to the said M/s ZPMC for supply of goods and services as per purchase contract for installation and commission. It also paid for technical consultancy and engineering services availed from M/s Liftech Consultants Inc., USA with regard to quality control of the cranes.

DECISION OF THE TRIBUNAL

The Appellate Tribunal held that the service to be performed by M/s Liftech Consultant Inc., USA was more of a reviewing the design. The power of review is something more than the power of supervision. However, it is something less than the development and transfer of services and design. If it is only suggestions given, then it will be review but if the M/s Liftech Consultant Inc., USA has forwarded to implement those suggestions on behalf of the assessee and have improvised the design or brought any major change in the design, then such suggestions would amount to transfer of technical services and design, which would be more than the power of review and would attract Article 12 of the India-US DTAA Treaty.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com  or call at 9555555480

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

COMPANIES ACT, 2013

COMPANIES ACT

Untitled37ASECTION 397

OPPRESSION AND MISMANAGEMENT

Where CLB passed status quo order in respect of subject property to restrain creation of third party rights, construction done by respondent tenant to repair that property could not be considered as detriment to interest of anybody and, therefore, contempt application filed to restrain construction by respondent was to be dismissed –[2015] (CLB – New Delhi)

COMPETITION ACT

SECTION 3

PROHIBITION OF AGREEMENTS – ANTI-COMPETITIVE AGREEMENTS

Where real estate developers i.e., Jaiprakash Associates (JAL) and JaypeeInfratech (JIL) did not have ability to influence conditions of competition in relevant market for provision of services for development and sale of residential apartments in Noida and Greater Noida and there were several established real estate players offering world class amenities, JAL/JIL was not in a dominant position in relevant market and, therefore, question of examining alleged abusive conduct did not arise – [2015] (CCI)

Where evidence available on record was insufficient to hold Opposite Parties responsible for having colluded in tenders for supply of AMDBS, a critical safety item required for railway coaches, complaint of alleged unfair business practices made by Informant against Opposite Parties was to be dismissed – [2015] (CCI)

FOREIGN TRADE (DEVELOPMENT AND REGULATION) ACT, 1992

SECTION 5

EXPORT AND IMPORT POLICY

Notification No. 48/2005 dated February 20, 2006 and Notification No. 8/2006 dated June 12, 2006 amending ‘Target Plus Scheme’ under EXIM Policy/Foreign Trade Policy 2004-2009 to restrict/reduce benefit to exporter retrospectively from 1-4-2005 were ultra vires, as already accrued benefit cannot be taken away by retrospective amendment; therefore, the said notifications were read down to be effective only from dates they are issued –[2015] (SC)

CUSTOMS ACT

SECTION 129A

APPEALS – RESTORATION OF – APPELLATE TRIBUNAL

Issue ‘whether Tribunal can restore appeals even when assessee made pre-deposit only after due date specified by High Court’ was referred to Third Member owing to difference of opinion – [2015] (Mumbai – CESTAT)

CUSTOMS TARIFF ACT

SECTION 3

LEVY OF ADDITIONAL DUTY EQUAL TO EXCISE DUTY

In view of Explanation 1 to Section 3 of Central Excise Act, 1944, in case of DTA clearances by 100% EOUs, CVD portion equal to excise duty is leviable at highest of excise duty rates in India. Thus, in case of goods liable to excise duty at different rates owing to exemptions or otherwise, CVD portion would be computed using highest rate of excise duty. This principle is analogous to principles in Section 3(1) of Customs Tariff Act, 1975 – [2015] (Mumbai – CESTAT)

SECTION 9A

CHARGE/LEVY – ANTI DUMPING DUTY

Where: (a) provisional anti-dumping was levied on 2-5-2002 and same became ineffective on completion of 6 months on 1-11-2002, and (b) final anti-dumping was levied only on 1-5-2003, then, no anti-dumping duty could be levied during gap period, viz., 2-11-2002 to 30-4-2003 – [2015] (SC)

CST & VAT

SECTION 2(xv) OF THE KERALA VALUE ADDED TAX ACT, 2003

DEALER

‘Flipkart’ is merely facilitating sales, purchase and delivery of goods, it can’t be considered as dealer of goods under Kerala VAT Act – [2015] (Kerala)

SECTION 6 OF UTTAR PRADESH VALUE ADDED TAX ACT, 2008

TAX INCIDENCE AND LEVY – COMPOSITION OF TAX LIABILITY

Compounding Scheme dated 9-6-2009 (Int Bhatta Samadhan Yojna) announced under section 6 for seasons 2007-08 (1-1-2008 to 31-9-2008) and 2008-09 (1-10-2008 to 31-9-2009) is not ultra vires to Constitution – [2015] (Allahabad)

CENVAT CREDIT RULES

RULE 2(l)

CENVAT CREDIT – INPUT SERVICE – GENERAL

Dealers of SIM Cards/Recharge vouchers cannot be regarded as ‘recipients of telecom services’ provided by telecom companies; hence, said dealers cannot take input service credit of service tax paid by telecom companies – [2015] (New Delhi – CESTAT)

STATUTES

DIRECT TAX LAWS 

Section 245R of the Income-tax Act, 961 – Procedure on receipt of application – Representation of cases before Authority for Advance Ruling – LETTER F.NO.225/261/2015/ITA.II, DATED 28-10-2015

Section 54EC of the Income-tax Act, 1961 – Capital Gain not to be charged on Investment in certain Bonds – Taxation of income from offshore rupee denominated bonds – PRESS RELEASE, DATED 29-10-2015

Section 92C of the Income-tax Act, 1961 – Transfer Pricing – Computation of Arm’s Length Price – Notified Tolerance Limit – NOTIFICATION NO.86/2015 [F.NO.500/1/2014-APA-II], DATED 29-10-2015

CORPORATE LAWS

IRDAI (Registration and Operation of Branch Offices of Foreign Reinsurers other Than Lloyd’s) Regulations, 2015 – NOTIFICATION F.NO.IRDAI/REG/17/107/2015, DATED 19-10-2015

Clarifications on Applicability of Provisions of section 45 of Insurance Act, 1938 in various scenarios – CIRCULAR NO. IRDA/LIFE/GDL/MISC/186/10/2015, DATED 28-10-2015

SEBI (Issue of Capital and Disclosure Requirements) (Seventh Amendment) Regulations, 2015 – Amendment in Regulation 58 and Schedule VIII – NOTIFICATION NO.SEBI/LAD-NRO/GN/2015-16/025, DATED 27-10-2015

IRDAI (Acquisition of Surrender and Paid Up Values) Regulations, 2015 – NOTIFICATION F.NO.IRDAI/REG/15/105/2015, DATED 16-9-2015

INDIRECT TAX LAWS (ST./EX./CUS. & (CST & VAT)

Extension of Filing of Online Return for Second Quarter 2015-16 –CIRCULAR NO.27 OF 2015-16 [NO.F.7(420)/VAT/POLICY/2011/PF/955-961], DATED 28-10-2015

Extension of time limit for Filing of Annual Return and Filing of Audit Report by a Dealer – NOTIFICATION NO.FTX.49/2014/88, DATED 12-10-2015

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com  or call at 9555555480

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)