Joint Venture taxation
This query is : Resolved
19 March 2009
Two Indian domestic company formed a JV and a service job awarded to them in JV name.My question is:-
1.what is the status of JV-AOP or Partneship?
2.Is separate PAN,TAN,Service tax reg. required.?
3.If the JV's fees sharing is 70:30 among two company,how Service Tax liability on fees received will be discharged?
4.How TDS deduction on fees received will be distributed?
5.Is it possible to show only fees in credit site and debit the fees distributed among company?Method of accounting of JV?
Please help me.
1.what is the status of JV-AOP or Partneship?
2.Is separate PAN,TAN,Service tax reg. required.?
3.If the JV's fees sharing is 70:30 among two company,how Service Tax liability on fees received will be discharged?
4.How TDS deduction on fees received will be distributed?
5.Is it possible to show only fees in credit site and debit the fees distributed among company?Method of accounting of JV?
Please help me.
Shyam Lal Naik
(Expert)
19 March 2009
I shall reply based on my experiance. However, I shall keep the question open for more inputs.
1. AOP
2. Yes
3. Whether the sharing ratio is for fee / profit. Normally it is Profit Sharing Ratio. Service Tax Registration is required separately for the JV. The Liability has to be discharged by the JV.
4. The JV will separately assessed to Income Tax. No question of sharing the TDS.
5. Please treat the JV as a separate entity, just like a Firm. "Fee Sharing", not required.
1. AOP
2. Yes
3. Whether the sharing ratio is for fee / profit. Normally it is Profit Sharing Ratio. Service Tax Registration is required separately for the JV. The Liability has to be discharged by the JV.
4. The JV will separately assessed to Income Tax. No question of sharing the TDS.
5. Please treat the JV as a separate entity, just like a Firm. "Fee Sharing", not required.
Rajesh Kumar
(Expert)
20 March 2009
1. Joint venture is a partnership.
2. Take PAN, TAN, ST regiatration etc. in the name of partnership and let the partnership be assesed in Income Tax.
3. All the liability shall be discharged by JV partnership.
4. There is no question of distributing TDS etc.
5. Income exraned from this partnership will not be included in the income of partners under Section 10 of IT Act.
2. Take PAN, TAN, ST regiatration etc. in the name of partnership and let the partnership be assesed in Income Tax.
3. All the liability shall be discharged by JV partnership.
4. There is no question of distributing TDS etc.
5. Income exraned from this partnership will not be included in the income of partners under Section 10 of IT Act.
20 March 2009
Thanks for reply.But i am confused.Can two Indian domestic private limited company form
a partnership firm?Then who will be partner?In JV taxation effect is double.So what is good for tax planning.The work order already awarded in the name of JV.In agreement on the basis work order awarded,there is no mention of AOP or partnership.So please advice.
a partnership firm?Then who will be partner?In JV taxation effect is double.So what is good for tax planning.The work order already awarded in the name of JV.In agreement on the basis work order awarded,there is no mention of AOP or partnership.So please advice.
Shyam Lal Naik
(Expert)
20 March 2009
1) A Pvt Ltd co. can be a partner in a Firm.
2) I do not understand, what is meant by "In JV taxation effect is double". Share of profit from Joint Venture is exempt in the hands of the member, in the instant case.
2) I do not understand, what is meant by "In JV taxation effect is double". Share of profit from Joint Venture is exempt in the hands of the member, in the instant case.
21 March 2009
Here in Jv taxation effect double means,If it is AOP then taxation effect is double.
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