07 September 2015
We are subsidiary company situated in india but our holding company is located at japan.
we are trading company in india & our goods are manufactured in japan, one of our client located at sri lanka, he wants goods at sri lanka & payment received in india & invoice raised in india but goods are delivered from japan to sri lanka. can we treated as sales in india & PLZ Do let me know tax implications also in india
07 September 2015
What is the residential status of your subsidiary company in India? Assuming it is resident company, the said transaction of sales is taxable in India.
07 September 2015
Since you say, it is a resident company, the income arising out of this transaction is taxable in India.
You can keep the proof of the transaction about the delivery of goods. That is sufficient.
INR is received by subsidiary company. So proof of payment received is with you.
(My query is...if holding company is in Japan, why can't your subsidiary be NON resident since the management and control of the company is from outside India
07 September 2015
what is vat implication, as you know our mrp is set for india after custom clearance of goods in india , though i said goods are not india so no custom paid in india, how we set MRP & goods movement from japan to sri lanka
07 September 2015
Please check the document that the Japan Company is preparing. If it is invoiced to Indian Company but delivery is in Srilanka you might have to treat it as import and export. Kindly consult your Auditor before doing anything, since VAT is local tax and may depend upon state to state
07 September 2015
Goods are not entering the jurisdiction of Delhi.Even if holding company bills subsidiary company, the sales is outside the purview of VAT.
08 September 2015
Let the holding company make the regular and routine BILL/INVOICE. This is very common transaction, in the regular course of business. The Purchase Order raised by the Subsidiary Company, stating that the goods are to be delivered at Sri Lanka and duly accepted by the Holding Company is the first hand proof. In the second instance, let the delivery challan of Holding Company be kept on record of subsidiary company.
CAclubindia
