Shabnam Shaikh
Shabnam Shaikh is a Partner in the Direct Tax and Private Client practice group in the Mumbai office.
Direct Tax
key
direct_tax
URL
/expertise/direct-tax
AAR applies ‘look through’ approach – denies treaty relief to Mauritian entities on indirect transfer of Indian shares
The Authority for Advance Rulings (AAR) recently rejected applications made by three Mauritian entities on the taxability of capital gains on indirect transfer of an Indian company’s shares, under the India-Mauritius Double Taxation Avoidance Agreement (Tax Treaty). The AAR held that that the transaction was prima facie designed for tax avoidance and that even otherwise, the benefit of the Tax Treaty cannot be allowed in this case.
Obligation to withhold tax at the specific rate under Indian income tax law stands unaffected by Tax Treaty
The Supreme Court of India (SC) in its recent case of PILCOM (Civil Appeal No. 5749 of 2012 with Special Leave Petition (Civil) No. 6829 and 7315 of 2019) ruled that the obligation of the payor to withhold tax at a specified rate of 10% under section 194E of Indian Income tax Act, 1961 (IT Act) on payments made to non-residents, is not affected by the tax treaty applicable to such non-resident recipient.
Supreme Court rules that liaison office does not constitute a taxable presence in India
The Supreme Court of India (SC) in Union of India & Anr v UAE Exchange Centre [Civil Appeal No. 9775 of 2011], held that the liaison office (LO) set up by UAE Exchange Centre LLC (Taxpayer) in India does not constitute its permanent establishment (PE) in India.