India: Diamond certification services not taxable technical services under treaty with United States (tribunal decision)

The KPMG member firm in India has prepared reports about recent tax developments.

Not taxable technical services under treaty with United States

The Surat Bench of the Income-tax Appellate Tribunal held that payments for diamond testing and certification services provided by a U.S. company to the taxpayer are not taxable as “fees for technical services” under the India-United States income tax treaty.

The tribunal held that the U.S. company did not “make available” technology, experience, skill, know-how, or processes to the taxpayer by virtue of simply providing the taxpayer with a report of certification.

The case is: ITO v. Star Rays.

Read a March 2022 report [PDF 339 KB] prepared by the KPMG member firm in India

Foreign investment in life insurance company ahead of IPO

The government reviewed the existing foreign direct-investment policy for permitting foreign investment in an IPO-bound life insurance corporation with an aim to facilitate disinvestment of the country’s largest insurer and other modifications for consistency and to provide further clarity of the existing foreign direct-investment policy.

Accordingly, amendments have been made under the consolidated foreign direct-investment policy circular of 2020, and concern: (1) permitting foreign investment in the life insurance company; (2) new inclusion/modification of definitions; and (3) other modifications for consistency/clarity under the foreign direct-investment policy.

Read a March 2022 report [PDF 431 KB] prepared by the KPMG member firm in India


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