“With this landmark judgement (Vodafone), the applicability of Section 195 on payments made in the course of exports as foreign agency commissions/royalties/offshore and professional services would require to be revisited/reconsidered,” President of the Federation of Indian Export Organisations (FIEO) Mr M Rafeeque Ahmed said in a statement here.
This is so because “there is no permanent establishment/territorial nexus and the situs (place) of service provided is outside the jurisdiction of tax authorities,” he said. Lauding the apex court’s judgement, the FIEO chief said payments made in the course of exports as foreign agency commissions, royalties, offshore and professional services may “find a logical settlement“.There has been a plethora of litigation with regard to these payments.
“Consensus has been that the anomaly is interpretational and superficial rather than an anomaly in law which we hope will be clarified by the Central Board of Direct Taxes (CBDT) given the historic judgement,” Mr Ahmed said. Essar is also likely to seek refund of $ 883 million, the amount deducted as withholding tax related to 22 per cent stake sale by its Mauritius entities in Vodafone Essar, from the I-T department.
In a far-reaching judgement, the Supreme Court had held last week that the Indian tax authorities had no jurisdiction to levy TDS on Vodafone in regard to its multi-billion dollar deal with Hutchison in 2007.
Note : As a part of Our Quality Policy , We Don’t Publish any Restricted Material on our Website . If you have issues kindly let us know here
Related Tags Incometax
CA Ankit Gulgulia (Jain) is Fellow Member of ICAI, Certified IFRS & Business Valuation from ACCA UK and is Practising Chartered Accountant with 8 Years plus of Rich Experience in Audit, GST, Income Tax, DGFT, Valuation, Strategic Advisory, Matters of FEMA, FDI, NCLT, RERA, ROC, SEBI, RBI, M&A, Fundraising, Startups etc as Founder of AGA, Chartered Accountants. AGA Works in wholesome business solutions right from scratch of Company Incorporation to Compliances all under One Roof. He also takes interest in being Virtual Chief Financial Officer (CFO) for Small and Medium Enterprises for Guiding them with All Business, Tax & Strategic Business Decision Making . To Know More, Learn here or contact us at email@example.com