Venkat Raj
Quick Summary
As I write this missive, I realize that the year 2025 has come to an end. The calendar year marked notable events. However, some disasters took place, like a major flight accident and Indigo operations coming to a halt. This year saw many reverse flip transactions taking place and some key demergers
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FAQ :
No, according to the Madras High Court ruling in CTS vs CIT, payments made for IPLC to an entity outside India do not constitute royalty, meaning no Tax Deducted at Source (TDS) is required.
The Supreme Court, in DIT vs. American Express Bank, upheld that head office expenses for non-residents are restricted to 5% of the adjusted total income of the Indian Permanent Establishment, as per Section 44C of the Income Tax Act.
The Bombay High Court in Colorcon Asia Pvt Ltd vs. JCIT suggested that excess DDT collected beyond the 10% rate stipulated by the India-UK Tax Treaty for dividends paid before 2020 is erroneous and contrary to law, potentially allowing for refunds.
No, the Delhi High Court in CIT vs Clifford Chance Pte Ltd ruled that a virtual PE is not recognised under the India-Singapore DTAA; physical presence and actual client work in India are required to establish a service PE.
The depreciation of the rupee increases the cost of imports and impacts GST for exporters and importers. Exporters like service providers may benefit, while importers, especially under Reverse Charge Mechanism (RCM), face higher costs, making refunds and credit facilities more complex.
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