The applicability of Goods and Services Tax (“GST”) on various land-related rights has been a subject of ongoing debate, leading to uncertainty for businesses, developers, and policymakers. While the GST framework seeks to tax the supply of goods and services, transactions involving land and immovable property present unique challenges due to their distinct legal nature.Continue Reading GST liability on the benefits arising out of land: The conundrum continues
The legal validity of the contentious CGST Notification No. 56/2023 (“Notification“), is facing challenges across multiple High Courts in India. The Notification, issued by the Central Board of Indirect Taxes and Customs (CBIC), extended the timeline for passing orders under Section 73(10) of the Central Goods and Services Tax Act, 2017 (“CGST Act“) for financial years 2018-19 and 2019-20.Continue Reading Legal debate at tipping point over Notification extending GST deadline
The Supreme Court (“SC”) recently addressed the validity of reassessment notices in Rajeev Bansal[1], issued under Section 148 of the Income Tax Act, 1961 (“IT Act”), from April 1, 2021, to June 30, 2021, even though the reassessment regime had been overhauled with effect from April 1, 2021. The Revenue argued that these notices fell under the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (“TOLA”), which relaxed the time limits for reassessment due to the COVID-19 pandemic (“Pandemic”). However, several High Courts, including the Allahabad and Gujarat High Courts,[2] had ruled that such notices were subject to the new reassessment provisions introduced by the Finance Act, 2021, and hence, without the applicability of TOLA, were time-barred. The SC, in this landmark decision, ruled in favour of the Revenue, by upholding the validity of TOLA and laid down several jurisprudential observations in its judgement.Continue Reading Tax reassessment proceedings: Supreme Court puts TOLA controversy to rest
In a landmark ruling, the Hon’ble Delhi High Court (“Delhi HC”) has held that profits generated by a Permanent Establishment (PE) in India shall be liable to tax in India, even if the parent enterprise has incurred losses on a consolidated basis. This decision overturns the previous judicial position set forth in the Nokia Solutions judgment and carries significant implications for global corporations operating in multiple jurisdictions.Continue Reading Delhi High Court rules on taxability of a PE’s profits despite global loss
While debentures have been a common mode of raising debt for companies, there still remains ambiguity regarding the taxation of certain income earned from debentures. Taxation of premium received on redemption of debentures is one such issue. Continue Reading Premium Received on Redemption of Debentures: Taxed as Interest or Capital Gains?
In part IV of our series on key legal consideration for establishing global capability centres (“GCCs”) in India,[1] we discuss the key taxation issues that foreign companies must be aware of ahead of setting up its operations in India.Continue Reading Taxation landscape of Global Capability Centres (GCCs) in India
In the bustling landscape of Indian factories and corporate setup, providing canteen facilities and other perquisites to employees, deputed persons from sister concerns and third-party contractors have become a common phenomena. The Factories Act, 1948, statutorily mandates employers to provide certain amenities, including canteen services, for factories with more than 250 workers, but for others, it is voluntary and provided as a goodwill gesture. To maintain a conducive work environment, such facilities have become important. However, the advent of the Goods and Services Tax (GST) has introduced complexities, especially concerning taxation on canteen facilities provided to employees, deputed persons and third-party contractors.Continue Reading GST on canteen facilities and it’s applicability on non-permanent employees
A Double Taxation Avoidance Agreement (“DTAA”) with one country might have a different treatment for the same income as compared to DTAA with another country. To ensure that such differential treatment is avoided, and similar benefits are available across different DTAAs, DTAAs may include the Most Favored Nation (“MFN”) clause. The MFN clause is not a part of the Organization for Economic Co-operation and Development’s (“OECD”) or the United Nation’s model tax conventions and is also not a standard clause of all DTAAs. Such a clause can be negotiated and included at the discretion of the contracting states for certain income (typically investment income).Continue Reading Supreme Court lays to rest the Most Favoured Nation Controversy
The concessionaire or contractors/ sub-contractors of the national/ state highways face a possible levy of Goods and Services Tax (“GST”) on their supplies. However, GST is exempted for services when toll is paid to access the roads or bridges.[1] The exemption is also applicable on payment of annuity for access to roads.[2] A contract in relation to highways may deal with several aspects such as construction of a highway, shops, operation of highways, maintenance of highways, collection of toll or separate charges like overhead charges, etc. Further, with different models of highway projects, it becomes essential to analyse the nature of supply, party rendering such supply to determine if any exemption or concessional rate is available.Continue Reading Karnataka High Court’s decision on GST levy provides a comfort to highway projects
In a recent decision of Union of India vs. Ashish Agarwal[1], the Supreme Court (“SC”) effectively overturned several High Court decisions which had quashed reassessment notices issued under Section 148 (as it existed prior to the amendments introduced through the Finance Act, 2021). The decision has a significant impact for pending reassessments, notices for which have been issued after April 1, 2021. This blog shall briefly explain the background to the appeal as well as the decision of the SC, and analyse the reasoning and impact of the decision.Continue Reading Supreme Court Overturns Several High Court Decisions Quashing Reassessment Notices