Direct Tax
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direct_tax
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Anshul Khemuka
Anshul is a Partner in the Direct tax practice group in the Bengaluru office. She has over 17 years of experience in areas of corporate taxation, tax litigation and transaction advisory. Her prior experience includes corporate development with a seafood start-up involving global acquisitions and expansion, and 14 years with the direct tax and regulatory practice of a Big4 firm.
India Amends its Tax Treaty with Mauritius, Adds Anti-Abuse Conditions
The Indian and Mauritian Governments have recently signed a protocol dated 7 March 2024 (Protocol) to amend the India-Mauritius tax treaty (Tax Treaty). The text of the Protocol was not available in public domain until 11 April 2024. The amendments appear to address the concerns surrounding ‘treaty shopping’ by incorporating a ‘Principal Purpose Test’ (PPT) under the Tax Treaty.
India-Spain Tax Treaty: Partial Relief to Spanish Residents Earning Royalty or Fee for Services from India
On 19 March 2024, the Indian Government issued a notification (Notification No 33/2024) amending the India-Spain Tax Treaty (Spain Treaty) to reduce the erstwhile 20% tax rate on royalties and fees for technical services (FTS) to a 10% tax rate pursuant to the ‘Most Favored Nation’ (MFN) clause in the protocol to the Spain Treaty (MFN Notification). The benefit of the reduced rate is available from Financial Year 2023-24.
Interpretational Issues in Anti-Abuse Provisions
Chambers of Tax Consultants (CTC) Monthly Journal
Supreme Court Holds Distributors of Telecom Companies are not Agents and there is no Obligation to Withhold Tax
In a recent ruling, the Supreme Court held that distributors of pre-paid recharge vouchers were not ‘agents’ of the telecom companies. Consequently, the telecom companies were not obligated to deduct tax on the discount provided to the distributors. The ruling settles an issue on which various High Courts expressed divergent views in the past. The Court delivered its judgment in a batch of tax appeals, with the lead case being that of Bharti Airtel Ltd.
CBDT provides Guidelines in Relation to TDS on Payments by E-Commerce Operators
On The Central Board of Direct Taxes (CBDT), the apex body for direct tax administration in India has issued guidelines vide Circular No. 20 of 2023 dated 28 December 2023 (CBDT Guidelines) to provide clarity in relation to certain nuances pertaining to the 1% TDS applicable on e-commerce operators facilitating online sale of goods or provision of services.