Latest Blogs from SBS and Company LLP

    Finance Act 2016 has introduced Equalization Levy w.e.f 01-06-2016 on specified services provided by non-resident not having Permanent Establishment (here in after referred as Specified Non Resident - SPN) in India. It is levied @6% on the amount paid to SPN.

     

    The levy refers to B2B transactions and not B2C transactions. This new levy introduced in line with the OECD BEPS action plan to tax e-commerce transactions.

     

    The services covered under the levy so far are related to online advertisement, any provision for digital advertisement space or facility or service for online advertisement or any other service as may be notified by the Central Government.

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    Presently, the Institute of Chartered Accountants of India (ICAI) has issued 39 Indian Accounting Standards (Ind AS) which have been notified under the Companies (Indian Accounting Standards) Rules, 2015 (“Ind AS Rules”), of the Companies Act, 2013. The Rule specifies the Indian Accounting Standards (Ind AS) applicable to certainclass of companies and set out the dates of applicability.

     

    India has chosen a path of International Financial Reporting Standards (IFRS) convergence rather than adoption. Hence, Ind AS is primarily based on the IFRS issued by the International Accounting Standards Board (IASB).

     

    Applicability of Ind AS As per the notification released by the Ministry of Corporate Affairs (MCA) on 16

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    RBI has issued ECB regulations viz., Foreign Exchange Management (Borrowing or Lending in Foreign Exchange)Regulations, 2000, Notification No. FEMA 3/ 2000-RB,dated May 3, 2000 read with Sec.6(3) of FEMA Act,1999

     

    Indian companies are allowed to access funds from abroad in the following Methods:

    ECB

    FCCBs

    Preference Shares/Debentures

    FCEB

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    Indian Tax environment has been rapidly changing to absorb the global changes and the need to curb the tax avoidance and restrict the black money, which have been the primary objectives of the government. The recent developments provide us with a glimpse of India’s treaty policy to prevent double non-taxation, curb revenue loss and check the menace of black money through automatic exchange of information. The following is a summary of the recent India- DTAA developments:

     

    India – Singapore:

     

    ØResident based to Source based: The India-Singapore DTAA at present provides for residence based taxation of capital gains of shares in a company. The Third Protocol amends the DTAA with effect from 1st April, 2017 to provide for source based taxation of capital gains arising on transfer of shares in a company. This will curb revenue loss, prevent double non-taxation and streamline the flow of investments.

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    Key Topics Covered:

    • INTERNATIONAL TAXATION
    • AUDIT
    • INCOME TAX
    • INDIRECT TAX
    • LABOUR LAWS

    Updates

    • COMPANIES ACT, 2013
    • INDIRECT TAX.
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