India: No obligation to withhold tax on notional income
Income from offshore supply of equipment and services not taxable in India
Income from offshore supply of equipment and services not taxable in India
The KPMG member firm in India has prepared reports about the following tax developments (read more at the hyperlinks provided below).
No obligation to withhold tax on notional income
The Delhi Bench of the Income-tax Appellate Tribunal held that an Indian subsidiary of a Korean holding company could not be treated as an “assessee in default’” under section 201(1)/201(1A) for failure to withhold tax on notional income attributed to the Korean company because there was no obligation to withhold tax under section 195 on the notional income.
The case is: LG Electronics India Ltd. Read a December 2023 report [PDF 424 KB]
Income from offshore supply of equipment and services not taxable in India
The Delhi Bench of the Income-tax Appellate Tribunal held that the income from offshore supply of equipment was not taxable in India since plant and equipment supplied to the Indian company were designed and manufactured outside India and the title was duly passed outside India on a “free on board” (FOB) basis. Further, the consideration for such offshore supplies was also received outside India in foreign currency and all activities such as manufacturing, fabrication, and designing of the plant and equipment were also undertaken outside India.
The case is: DSD Noell GMBH. Read a December 2023 report [PDF 433 KB]
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