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Deloitte India Tax Thoughtware
Delve into industry-specific updates, explore the interplay of tax-technology in business, learn about the global tax landscape, and much more.
2024
November
Indirect tax newsletter (September - October 2024)
We are delighted to share a few important judgments/advance rulings passed under the Goods and Services Tax (GST), Customs, Central Excise, and Service Tax available in the public domain from September to October 2024. This issue also covers some updates from the indirect tax perspective.
September
Social Security Newsletter (August - September 2024)
The Shram Suvidha portal was launched in October 2014 to consolidate information on labour inspection and its enforcement, leading to transparency and accountability in inspections. Through recent press releases, it has been made clearly evident t hat the MOLE is taking steps to roll out th e upcoming labour codes. One such recent update has been on the launching of the revamped Shram Suvidha Portal by the year end, to aid in improving the ease of doing business.
August
Indirect tax newsletter (July - August 2024)
We are delighted to share a few important judgments/advance rulings passed under the Goods and Services Tax (GST), Customs, Central Excise, and Service Tax available in the public domain from July to August 2024. This issue also covers some updates from the indirect tax perspective.
July
Social Security Newsletter
In this edition:
- Text of labour and employment track finalised in G20 labour and employment ministers’ meeting
- Employment linked incentives announced in the union budget 2024
- Tabling of the bill on reservation for local candidates by the Karnataka government
- Extension of working hours in the IT sector being deliberated by the Karnataka Government
- SOPs for authorised officers being issued for audit of exempted establishments under the EPF Act
- SOPs for authorised officers being issued for freezing/defreezing of accounts
- Amendments under Tamil Nadu Shops and Establishment Act, 2018 and corresponding rules
- Inclusion of insurance related details of establishments in Maharashtra
- Haryana mandates labour welfare fund contributions to be made monthly on an online portal
June
Social Security Newsletter
In this edition
Regulatory updates
- Telangana renews exemptions given to IT/ITeS establishments under Telangana S&E Act
- IT/ITeS establishments in Karnataka will continue to be exempted from the provisions of Karnataka Standing Orders Act
- Rates of damages under the Employees’ Provident Funds and Miscellaneous Provisions Act reduced
- Timelines for mandatory seeding of Aadhaar for filingof ECR extended
- Karnataka Government releases draft bill on social security and welfare measures for Platform based Gigworkers
- All shops and Commercial Establishments to be openon all 365 days and operate 24 hours in Chandigarh
Indirect tax newsletter (May - June 2024)
We are delighted to share a few important judgments/advance rulings passed under the Goods andServices Tax (GST), Customs, Central Excise, and Service Tax available in the public domain fromMay to June 2024. This issue also covers some updates from the indirect tax perspective.
Fast-tracking advance pricing agreements for India’s global capability centres
India’s export of services led by IT and business services has grown substantially. This has been underpinned by Multinational Enterprise (MNE) groups (primarily from the US) setting up Global Capability Centres (GCCs) in India using the technical and English language skills of India’s growing workforce. To maintain India’s global competitive edge in the GCC sector, the ease of doing business for these GCCs needs to be constantly monitored and improved. A common challenge for GCCs is negotiating tax certainty for their transfer pricing transactions with their foreign headquarters and other companies within their MNE group.
May
Social Security Newsletter
Regulatory updates
- Enhancement of for auto claims processing and
expansion of ease of living by EPFO
- Approval of interest rate of 8.25% on PF accumulations
for FY 23 24 - Steps taken to promote apprenticeship and streamline
Direct Benefit Transfer implementation - Increase in % quota for Persons with Disability for
training under the Apprentices Regulation
- Introduction of new roles under notified designated
trades for engaging apprentices - IRDAI releases new guidelines for health insurance
products
Rulings
- Principle of ‘no work’, no pay’ cannot be universallyapplied when the employer is at fault
- Employee is entitled to choose hospital of their choiceto claim compensation
- Dismissal from service for being absent for just fewhours is disproportionate
- Leave encashment as the right of the employee
- Maternity benefit not applicable in certain cases
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Environmental, Social, and Governance (ESG) Transfer Pricing (TP)
Governments are increasingly promoting sustainability objectives, requiring businesses to go beyond existing legal requirements towards adopting a more ESG based approach. These initiatives are bound to impact tax management, and the road to net zero is expected to drive new partnerships, collaborations, and related restructuring activit ies . Considering the changing scenario, businesses find tax advisory at the core of ESG, right from diligence to tax structuring.
April
Indirect tax newsletter (January – April 2024)
This newsletter captures a few important judgments/advance rulings passed under Goods and Services Tax (GST), Customs, Central Excise, and Service Tax available in the public domain from January to April 2024. It also covers some of the updates from an indirect tax perspective.
Social security newsletter
Regulatory updates
- Government of Karnataka notifies regulation to provide social security and welfare measures for Motor Transport and Other Allied Workers
- Governments of Haryana and Rajasthan provide exemptions for factories for employing women during night shift subject to conditions being fulfilled
- Government of Gujarat grants certain exemptions to IT/ITes and financial services sector
- Maharashtra Labour Welfare Fund contribution rates increased
- Government of Maharashtra amends Rules on Professional Tax
- Sikkim issues draft rules under the Occupational Safety, Health and Working Conditions Code, 2020
Rulings
- Circumventing appellate procedure to avoid mandatory pre deposit not permissible
- Contract worker who carries out work of a perennial nature to be regularised
- Maternity benefit cannot be denied to an employee who is on probation
- Provisions mandating provident fund and pension contributions by International Workers constitutionally invalid
Global Trade Advisory Landscape
The evolving landscape ofcross-border trade – What it means for a trade
The global adoption of the Trade Facilitation Agreement (guidanceon WCO'c safe framework of standards) has brought about significanttransformations in customs and other regulatory compliances and proceduresrelated to cross-border trade.
Customs reforms – Reshaping India’s trade
- Ease of doing business
- Digitisation
- Make in India
March
Social security newsletter
Regulatory updates
- Employee Provident Fund Organisation (EPFO) releases guidance to regulate pension entitlement for employees with multiple accounts
- Standard Operating Procedure (SOP) for handling transaction-less and inoperative accounts notified.
- Digital joint request under Para 26(6) of the EPF Scheme, 1952 mandated for new members.
- Ministry of Women and Child Development notifies National Minimum Standards and Protocol for Crèches (Operation and Management) –aims to standardisesetting up and running of creches.
- Partial withdrawal from National Pension Scheme (NPS) allowed subject to conditions.
- Amendments proposed to the sexual harassment of women at workplace (prevention, prohibition, and redressal) act, 2013 for removal of conciliation and extension of timelines for filing complaint.
- SSA between India and Brazil comes into effect, -19thagreement for India with another country.
- Welfare schemes for platform-based gig-workers proposed.
- Recommendation of 8.25% as rate of interest to EPF subscribers for FY 2023-24.
Rulings
- Claim of undue influence by an employee who has voluntarily retired and accepted benefits, not acceptable.
- Recovery of excess payment of allowance due to adoption of wrong principle and erroneous calculation of salary not permissible.
- No differentiation permissible between regular and contractual employees on woman’s right to maternity leave and benefit under the Maternity Benefit Act, 1961.
February
The High Court’s decision on Venture Capital Funds (VCF)
M/s ICICI Econet Internet and Technology Fund and Others vs. Commissioner of Central Tax, Bengaluru North
Facts:
- VCFs are established as ‘’Trust’’ and registered with the SEBI as VCFs.
- Several classes of Investors have contributed to the fund.
- The trustee had appointed asset managers to manage the assets.
- Surplus funds were distributed to investors after meeting operational expenses. Certain accounting adjustments were also made.
- Carried Interest paid as return on investment to a specified class of investors, including fund managers.
- Demand confirmed on merits for amount retained towards expenses and carried interest paid.
January
Import of Secondhand IT assets (laptops, computers, monitors, and printers) from SEZ to DTA
Import of secondhand goods are generally restricted under para 2.31 of the Foreign Trade Policy (FTP); hence, an import licence is required from the Directorate General of Foreign Trade before undertaking such imports into India. The licencing requirement applies to used desktop computers, personal computers, laptops, air conditioners, electronics, IT goods, etc. The FTP was silent on the applicability of the licence in the case of the transfer of used assets from Special Economic Zone (SEZ) to Domestic Tariff Area (DTA) in the event of business transfer, de-bonding, hive off , de-merger, closure, etc.
2023
October
Indirect Tax Newsletter (September – October 2023)
We are delighted to share a few important judgments/advance rulings passed under the Goods and Services Tax (GST), Customs, Central Excise, and Service Tax available in the public domain from September to October 2023.This issue also covers some updates from the indirect tax perspective.
September
Indirect Tax Newsletter (July - August 2023)
We are delighted to share a few important judgments/advance rulings passed under the Goods and Services Tax (GST), Customs, Central Excise, and Service Tax available in the public domain from July to August 2023. This issue also covers some updates from the indirect tax perspective.
August
Indirect Tax Newsletter (May - June 2023)
We are delighted to share a few important judgments/advance rulings passed under the Goods and Services Tax (GST), Customs, Central Excise, and Service Tax available in the public domain from May to June 2023. This issue also covers some updates from the indirect tax perspective.
GTA Newsletter April - June 2023
This newsletter talks about: Amnesty Scheme for one-time settlement of default in Export Obligation (EO) by Advance authorization (AA) and Export Promotion Capital Goods (EPCG) authorization holders. Procedure for re-assessment of finally assessed Bill of Entries (BoE) to implement Hon'ble Supreme Court direction relating to pre-import condition in Advance Authorization (AA). Mandatory additional qualifiers in import/export declarations in respect of certain products w.e.f 1 October 2023. Other changes in Customs and Foreign Trade Policy 2015-2020.
July
GST on Online Gaming
The Online Gaming industry in India has witnessed significant growth and is emerging as a thriving sector with immense economic potential. This report provides an in-depth analysis of the tax landscape of the online gaming industry in India, with a focus on the proposed GST amendments and the challenges associated with them.
June
Indirect Tax Newsletter (March- April 2023)
We are delighted to share a few important judgments/advance rulings passed under the Goods and Services Tax (GST), Customs, Central Excise, and Service Tax available in public domain from March to April 2023. This issue also covers some of the updates from an indirect tax perspective.
May
April
India Global Trade Advisory Newsletter
On the Customs front, the Union Budget 2023 placed emphasis on boosting manufacturing, enhancing domestic value addition, promoting export and encouraging green energy and mobility. In Budget 2023, Government has simplified the tax structure with fewer tax rate slabs to help in reducing compliance burden and improving tax administration. Further, the Government has proposed some legislative changes as part of the policy decision and to enhance trade facilitation. Click here to read the detailed budget publication on Union Budget 2023.
Indirect Tax Newsletter
We are delighted to share a few important judgments/advance rulings passed under the Goods and Services Tax (GST), Customs, Central Excise, and Service Tax available in public domain from January to February 2023. This issue also covers some of the updates from an indirect tax perspective.
January
Indian Power Sector: The Future Fuel
As India inches towards its net zero emission goal, we are pleased to share a thought paper on the "Indian Power Sector: The Future Fuel." It provides insight into the power sector, primarily discussing various tax nuances along with valuable business perspectives.
Indirect tax newsletter | (November - December 2022)
We are delighted to share a few important judgments/advance rulings passed under the Goods and Services Tax (GST), Customs, Central Excise, and Service Tax available in public domain from November to December 2022. This issue also covers some of the updates from an indirect tax perspective.
2022
December
India Global Trade Advisory Newsletter | (October - December 2022)
Extension of Foreign Trade Policy 2015-2020 (FTP) and Handbook of Procedures 2015-2020 (HBP), DGFT extends the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme to chemicals, pharmaceuticals, and articles of iron and steel from 15.12.2022, DGFT extends the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme to chemicals, pharmaceuticals, and articles of iron and steel from 15.12.2022.
November
October
Indirect tax newsletter | (September - October 2022)
We are delighted to share a few important judgments/advance rulings passed under the Goods and Services Tax (GST), Customs, Central Excise, and Service Tax available in public domain from September to October 2022. This issue also
covers some of the updates from indirect tax perspective.
September
August
Indirect tax newsletter | (July- August 2022)
We are delighted to share a few important judgments/advance rulings passed under the Goods and Services Tax (GST), Customs, Central Excise, and Service Tax available in public domain from July to August 2022. This issue also coverssome of the updates from indirect tax perspective as well.
July
Indirect tax newsletter | (May - June 2022)
We are delighted to share a few important judgments/advance rulings passed under the Goods and Services Tax (GST), Customs, Central Excise, and Service Tax available in the public domain from May−June 2022. This issue also covers some of the updates from the indirect tax perspective.
June
India Global Trade Advisory Newsletter | (April - June 2022)
Comprehensive Economic Partnership Agreement (CEPA) between India & UAE is made effective from 1 May 2022, Harmonizing of Customs Tariff Act 1975 as per the Finance Act, 2022, w.e.f. 01.05.2022, Other changes in customs and Foreign Trade Policy 2015-2020.
May
Indirect Tax Newsletter | (March - April 2022)
We are delighted to share a few important judgments/advance rulings passed under the Goods and Services Tax (GST), Customs, Central Excise, and Service Tax available in the public domain from Customs, Central Excise, and Service Tax available in the public domain from March to April 2022. This issue also coverssome of the updates from indirect tax perspective as well.
April
India Global Trade Advisory Newsletter | (January to March 2022)
On the customs front, the focus of the Union Budget 2022 was on promoting 'Make in India' and taking measures to facilitate trade. In the Budget speech, the Finance Minister mentioned that Customs' reforms have played a very vital role in domestic capacity creation, providing level playing field to our MSMEs, enhancing ease of doing business and being an enabler to other policy initiatives such as Production Linked Incentive (PLI) Schemes and Phased Manufacturing Plans (PMP).
March
Life Sciences and Health Care: Business considerations consequent to Union Budget 2022 and the recent Supreme Court ruling
The Finance Bill, 2022 has proposed amendments to income-tax provisions on the deductibility of expenses and withholding tax on expenses incurred by pharmaceutical companies on travel, hospitality, conference expenses, etc., of medical practitioners.
February
Electronic invoicing system
GST collection in January 2022 stood at INR 1,38,394 crore, making it the seventh consecutive month when collections crossed the INR one-lakh-crore mark. While the recovery of the economy is a major factor, measures such as the introduction of e-invoicing and the linking of inward and outward supply returns with main GST returns (GSTR3B), have played a crucial role.
2021
December
October
Intra-Group Services (‘IGS’) - A necessary controversy?
With an aim to increase profitability, Multinational Enterprises (MNEs) or multinational groups strive to achieve economies of scale and efficiencies. MNEs tend to invest excessive man hours due to lack of access to best practices/specialised knowledge that otherwise could be better utilised in discharging their key responsibilities. This is where IGS come to MNEs’ aid.
India Global Trade Advisory Newsletter
This newsletter talks about Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme Guideline & Rates, Auto Renewal of certification for Authorised Economic Operator (AEO)-T1 entities, Improvement in Faceless Assessment, Other changes in Customs and Foreign Trade Policy (FTP) 2015-2020, and more.
September
The Pulse: FPI Newsletter | September 2021
Pulse is a quick guide to the ongoing tax and regulatory developments in India that are relevant to Foreign Portfolio Investors (FPIs). It highlights key components of changes, their impact on FPIs and the way forward.
Our endeavor is to help you comprehend the changes easily and equip you with the requisite knowledge to assist you in staying ahead of the curve.
July
Pillar One and Pillar Two
On 5 June 2021, the G7 countries announced a political agreement on Pillar One and Two. The changes proposed by the US in April 2021 formed the basis for the political agreement. This was followed by a statement by the Inclusive Framework on 1 July 2021, announcing a consensus by 130 countries. In the meeting during 9–10 July, G20 accepted the Two Pillar solution.
G7 announcement – What lies ahead in transfer pricing?
Almost two years ago, in its inclusive framework with G20 nations, the Organisation for Economic Cooperation and Development (“OECD”) proposed a twopillar, consensus-based solution, to tackle two of the most prominent tax issues relating to – (i) taxing the digital economy and (ii) base erosion due to shifting of profits to low or no tax jurisdictions.
India-UK Free Trade Agreement: The time has come
As part of its new trade policy, the UK has been negotiating trade agreements with several countries on a war footing, even amidst the pandemic. Apart from rolling over most of the trade agreements between the EU and other countries, the UK had concluded an independent Free Trade Agreement (FTA) with Japan even before the UK’s deal with the EU. The UK and India’s Prime Ministers recently launched the “Enhanced Trade Partnership” (ETP) and announced their intent to negotiate a comprehensive FTA. They also agreed to continue removing trade barriers and have set an ambitious target of more than doubling UK–India trade by 2030, including the consideration of an Interim Trade Agreement to deliver an “early harvest”.
Interplay of OECD Pillar 1 and impact of COVID-19 in India
This article discusses the interplay of OECD’s guidance on a new tax regime under Pillar 1, impact of COVID-19 on the digitisation roadmap, unilateral measures taken by the Indian Government to amend laws for taxing the digital economy, and the need for businesses in this space to be prepared for what lies ahead.
India Global Trade Advisory Newsletter | April-June 2021
With the signing of the trade agreement between the two countries, several products from both countries will enjoy the benefit of greater market access at concessional duties. Further, trade agreement would also help in providing impetus to exports from India to the Mauritius...
June
Emerging transfer pricing landscape in the digital world
To stay abreast of future demands, the tax and transfer pricing teams would need to expand their horizons, and adopt and learn new technologies to stay relevant. Multinational corporations would need to take a deep dive into their current transfer pricing approach and processes, and evaluate their needs and expectations from technology. Reimagining the entire transfer pricing process using technology could be the best way to get the most out of digitisation. This would help organisations adopt the correct technology platform suitable to their needs.
April
The Pulse: FPI Newsletter | April 2021
Pulse is a quick guide to the ongoing tax and regulatory developments in India that are relevant to Foreign Portfolio Investors (FPIs). It highlights key components of changes, their impact on FPIs and the way forward. Our endeavor is to help you comprehend the changes easily and equip you with the requisite knowledge to assist you in staying ahead of the curve.
India Global Trade Advisory Newsletter (January - March 2021)
On the customs front, the focus of the Union Budget 2021 was on promoting 'Make in India' and taking measures to facilitate trade. In the Budget speech, the Finance Minister mentioned that the thrust is now on easy access of raw materials and exports of value-added products from India.
In Budget 2021, the tax rates under customs have been rationalised per different sectors, including electronic and mobile phone; iron and steel; textile; and chemicals and renewable energy. Further, the Government has proposed some legislative changes to enhance trade facilitation and promote 'Make In India'.
March
Business restructuring in context of the Recent Danish National Court ruling
A business restructuring may typically be defined as a cross-border redeployment of functions, assets, and/or risks by a Multi-National Enterprise (MNE). High degree of globalisation, competition, digitisation, political changes, trade war, and the ‘new normal’ ushered in by the pandemic, has led to heightened focus for MNEs across the globe to identify various alternatives to optimise their supply chain.
Business restructuring may impact the profits and consequently tax payments in their respective jurisdictions and hence has been receiving increased focus by the tax authorities.
January
Can tax reforms be a shot in the arm for COVID-hit Indian economy?
Starting from the Goods and Service Tax (GST) reforms to the recent farm and labour law reforms, the pandemic has not been able to dampen the government’s intent for marching ahead with economic reforms coupled with tax policy rationalisation, changing the COVID-19 adversity into an opportunity. Announcing some strong measures to revive the economy via its flagship programme, “Atmanirbhar Bharat Abhiyan”, India has come out with a comprehensive economic package of US$265 billion, or approximately a tenth of India’s GDP.
2020
December
The Pulse: FPI Newsletter
Pulse is a quick guide to the ongoing tax and regulatory developments in India that are relevant to Foreign Portfolio Investors (FPIs). It highlights key components of changes, their impact on FPIs and the way forward. Our endeavor is to help you comprehend the changes easily and equip you with the requisite knowledge to assist you in staying ahead of the curve.
COVID-19 Impact: Benchmarking in uncertain times
COVID-19 has created a spell of disruptions and changes that have left practically no facet of business untouched. The impact of the pandemic has extended to multinational corporations and their entities across the globe, including India. In this context of COVID-19, we are pleased to present our thought leadership publication on determination of arm’s length margins.
The pandemic has unsettled the normal price-setting mechanism that is predominantly based on historic (multiple year) data, thereby calling for a forward-looking approach to set transfer price amongst associated enterprises in a multinational group. This paper sets out the framework for an advance determination of transfer prices using a multi-pronged approach of predictive modelling, quarterly trends, and adjustments to costs.
November
Supply-chain shifts and some key India tax aspects
As economies and businesses continue to experience the tumultuous ride owing to COVID-19, we have embraced a multitude of changes from the way we operate to how we live. The impact of this on the global supply chain, an important lever that forms the spine of a business, was inevitable — creating in equal measure, situations of distress and of opportunities around it.
With its diverse demographic composition and robust improvements in infrastructure and digital space, India has a remarkable potential to meet the evolving requirement of multinational companies for an alternate supply chain ecosystem.
Learn about the advantages offered to businesses in India and its forward-looking policies, making it an attractive destination for a supply-chain ecosystem.
Landscape of e-invoicing in India
Electronic invoicing or e-invoicing is perhaps the biggest transformation to the goods and services tax (GST) regime, after introduction of GST in July 2017. The GST council has introduced e-invoicing in phases to enhance and make the GST structure effective. This staggered approach is intended to provide an opportunity to both the government and the businesses to prepare for a major transformation in GST compliance construct. E-invoicing is running successfully in many countries across the globe already. India has also adopted contemporary international best practices for e-invoicing of business transactions during the first phase introduced from 1 October 2020. Essentially, GST e-invoicing introduces a process of authenticating an electronically generated invoice through the reporting platform of the Indian GST Authorities.
October
Tax Operate
The world is changing and so are the businesses. The new leaner business organisationslook at factors, internal and external, for improving productivity and while doing so, reducing work cycles and costs. These can be achieved by channelling sources in core business operations and outsourcing non-core operations, such as tax compliance and controversy management. Read the report for insights on ‘Tax Operate’ and how it can help organisations’ tax function to achieve efficiencies in operations.
India Global Trade Advisory Newsletter (July - September 2020)
In this issue, we will share a few important topics like CAROTAR 2020, FAQs on manufacturing and other operations in Customs Bonded Warehouse (CBW), Other changes in Customs and FTP 2015–2020, Step towards digitalisation of compliance plus procedures under customs and FTP, News on levy of ADD and News on levy of Safeguard duty.
September
August
E-commerce in new tech-driven India: Embracing the new normal
The Government of India (GoI) has always acknowledged e-commerce and internet penetration as key enablers for economic growth. The GoI has also been steadily laying down robust administrative, regulatory, and legal mechanisms to support growth initiatives. Building upon the dynamic scope of FDI regulations and the evolving tax landscape, this report aims to elucidate various structures and business models (powered by innovation and digitisation) that can provide the necessary impetus to businesses in the post COVID-19 scenario. It also touches upon the tax aspects affecting key business activities and avenues that emerging e-commerce models need to consider.
This document discusses opportunities and strategies that e-commerce companies can adopt to meet evolving consumer expectations in the current crisis.
Landscape of e-invoicing in India
Electronic invoicing or e-invoicing is the next big phase in the goods and services tax (GST) ecosystem. The GST council has introduced e-invoicing in phases to enhance and make the GST structure effective. This staggered approach is intended to provide an opportunity to both the goods and services tax network (GSTN) and the businesses to prepare for a major transformation in GST compliance construct. E-invoicing is running successfully in many countries across the globe already. India will also be following contemporary international best practices for e-invoicing of business transactions with the introduction of this measure. Essentially, GST e-invoicing introduces a process of authenticating an electronically generated invoice through the reporting platform of the Indian GST Authorities.
July
India Global Trade Advisory Newsletter (April - June 2020)
The COVID-19 outbreak posed unprecedented challenges for every country, and has adversely affected global trade and business. It has brought global business to a halt and the times ahead will be challenging for every nation. The pandemic has presented fresh challenges for the Indian economy too. To deal with the impact of COVID-19, the central government took a slew of trade facilitation measures to minimise its impact on business and overcome disruption in international supply chain. Some major measures taken by the government are mentioned in the Thoughtware.
Three years of GST: Journey so far and the way forward
It has been three years since the introduction of Goods and Services Tax (GST), India’s biggest tax reform, on 1 July 2017. It has been a roller coaster ride for the government, industries, and consumers due to the amount of changes and reforms introduced in the past three years. These changes were primarily focused on rationalising rates, simplifying procedures, and curbing tax evasion. Stabilising one of the world’s biggest online tax systems, GSTN, was also a key focus area for the government.
May
India as a manufacturing hub – Tax and regulatory incentives
At present, India is one of the world’s fastest-growing economies in the world.Make in India is a flagship programme of the Government of India designed to facilitate investment, foster innovation, enhance skill development, protect intellectualproperty, and build best-in-class manufacturing infrastructure in the country. This initiative’s primary objective is to attract investments from across the globe andstrengthen India’s manufacturing sector, while generating widespread employment opportunities.
Could you leverage your Indian buyout?
India has emerged as one of the strongest markets for Mergers and Acquisitions (M&A). In 2018 and 2019, thevalue of M&A activity was US$ 129 billion and US$ 64 billion, respectively 1 . During 2019, Private Equity (PE)investments witnessed an increase of 13.8 percent in terms of value 2 . Across the globe, the trend of using debtto fund acquisitions has increased.
Buying a business? What to buy?
Buying an existing business, which is already generating cash flows and profits, is often a more prudent decision than starting from scratch. An existing business has an established client base, reputation, and employees who are familiar with different aspects of the business. There is no need to reinvent the wheel with respect to setting up new procedures, systems, and policies as a successful formula for running the business has already been put in place.
April
COVID-19 – Global mobility considerations
Travel-related restrictions triggered by COVID-19 pose significant challenges to businesses. While the decisions are being driven keeping in mind the emotional and physical well-being of employees, unplanned travel could trigger a series of compliance obligations and issues from an individual as well as corporate tax perspective. It is important for companies to look at cost optimisation opportunities keeping in mind the existing tax and social security treaties amongst countries. Companies need to track employee locations, assess compliance requirements, review mobility-related compensation, revisit related policies for agility, and strategise for the future.
Equalisation levy on e-commerce operators
Taking a cue from the G20 / OECD Base Erosion and Profit Shifting (BEPS) Action 1 dealing with digital economy, India introduced an Equalisation Levy (‘ EL’) in 2016 at the rate of 6 percent on non-resident companies engaged in online advertisement and related activities.
The scope of the said provision has now been expanded to include EL of 2 percent on consideration received or receivable by an ‘e-commerce operator’ from ‘e commerce supply or services’, and is effective from 1 April 2020.
March
The Direct Tax Vivad Se Vishwas Rules, 2020 – Procedure and Forms
The Direct Tax Vivad se Vishwas Act, 2020 introduced a dispute resolution scheme, which was applicable to all appeals/petitions filed by the taxpayers or the income tax department, which were pending until 31 January 2020, before any appellate forum. In essence, it offered complete waiver of interest and penalty if the taxpayer agreed to pay the disputed tax amount by 31 March 2020.
In connection with this scheme, the much awaited Rules laying out the forms and procedures for the Direct Tax Vivad se Vishwas Act, 2020 (the VsV Act) were released by the Central Government vide notification dated 18 March 2020. These Rules are titled as “The Direct Tax Vivad se Vishwas Rules, 2020” (the VsV
Rules). The Rules have laid out five forms in numerical order for declaration, undertaking, granting of certificate, intimation of payment alongwith proof
of withdrawal and issuance of order. As expected, the forms must be filed online under digital signature or through electronic verification code and therefore,
taxpayers may still be able to achieve resolution of their tax disputes within the first window, which ends by 31 March 2020 per the VsV Act.
The second window starts from 1 April 2020 until a date to be specified per the VsV Act, (likely to be 30 June 2020 per the finance minister’s Union Budget
2020 speech) In this window, the taxpayer may still be able to settle his disputes and get complete waiver of interest and penalty, subject to paying an additional amount as specified in the VsV Act which in most cases, will be 10 percent of the disputed tax.
India Global Trade Advisory Newsletter (January - March 2020)
The focus of Union Budget 2020 was, amongst other things, on increasing ease of doing business and ensuring level playing field for domestic industry. With a focus to boost domestic manufacturing and entice large investments in mobile phones, electronic equipment, and semiconductor packaging, a detailed scheme will be announced.
Further, Finance Minister also mentioned that customs duty exemptions will be comprehensively reviewed by the government by September 2020. Customs law and procedures will also be reviewed for their alignment with needs of changing times and ease-of-doing business.
Free Trade Agreement (FTA) utilisation – need for a robust ”origin management system”
Government vide Finance Act 2020, has introduced a new chapter under the Customs Act 1962 with respect to Administration of Rules of Origin (ROO). This can have multi-fold impact on the companies availing benefit under the Free Trade Agreements (FTA) and hence, companies need to be fully prepared to handle the forthcoming changes.
India has signed more than eighteen trade agreements, including Generalised System of Preferences (GSP) benefits offered by developed countries. India has signed up key trade agreements with ASEAN countries, Japan, Korea, Singapore, SAARC countries, SAPTA and is eligible for benefits under GSP offered by developed countries.
The Government has witnessed that there is growth in the benefits being claimed by the importer under various FTAs and there are instances where undue claims of FTA pose threat to domestic industry, thus such imports require stringent checks. Hence, with this backdrop, Hon’ble Finance Minister has proposed to introduce governing provisions for administration of Rules of Origin (ROO) by customs authorities.
The Direct Tax Vivad se Vishwas Bill, 2020: Decoding the amended bill and circular
“The Direct Tax Vivad se Vishwas bill, 2020” was tabled on 5 February 2020, in the Lok Sabha, to provide a resolution for pending income-tax disputes. Thereafter, official amendments to the bill were proposed for accommodating the representation received from key stakeholders. However, several aspects of the scheme required clarifications, which the government provided in the form of an amended bill, passed by the Lok Sabha on 4 March, and by way of a circular issued by the Central Board of Direct Taxes (CBDT). The amended
bill was passed by the Rajya Sabha on 13 March 2020. The President of India provided his assent to the bill on 17 March 2020, thus enacting the "Direct Tax Vivad se Vishwas Act, 2020" (Act or VsV scheme).
February
January
Infrastructure: Build the new, save the old, find the funds
Building India’s infrastructure assets remains an important area for the government. Road and rail networks in the country need to be built or upgraded. Moreover, power production still relies on coal, telecom companies are in distress, networks are patchy, airports are congested, and airlines are in trouble. To address these issues, the Indian government has set out a plan to spend US$ 1.4 trillion on infrastructure in the next five years and achieve its ambitious target of making the country a US$ 5 trillion economy.
2019
December
Real Estate Investment Trusts
Over the past few years, India’s commercial real estate sector has seen a sequential growth, largely driven by the continued demand traction from the country’s technology sector and with new demand coming in from the rapid strides in the start up ecosystem. Currently, the estimated size of commercial office space that can be transitioned to Real Estate Investment Trusts (REITs) is nearly 300 million square feet, translating to a potential market size of over US$ 35 billion.
November
India: Economy treading on thin ice
Multinational companies looking for alternate manufacturing destinations to diversify their supply chain and reduce costs present India an opportunity to be the next emerging manufacturing hub. Not to mention India’s reputation in services exports is an advantage that is likely too difficult for global investors to ignore.
Digital DNA
Disruptions in the digital environment are constant and varied. Some are simply noise while others are disintermediating. There are cultural dimensions resident in the organization that either support or detract from the organization’s ability to work in an environment of constant disruption.
Digital Tax Transformation
Transforming a tax function relies on technology as an integral component of any transformation strategy in an organisation. Any investment in digitisation of tax technology solutions should assess the feasibility and utility of such solutions. Upon adoption of tax technology, the organisation might face challenges of integrity of data being fed. However, the joined efforts of various teams related to IT technology, tax function, and analytics can overcome such limitations.
September
August
Multilateral Instrument (MLI) Ratification
Overview
- Under the OECD*/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS), more than 125 countries are collaborating to put an end to tax avoidance strategies that exploit gaps and mismatches in tax rules to avoid paying tax
- MLI is an outcome of BEPS Action Plan (AP) 15 of the OECD/G20 Inclusive Framework, which offers solutions for governments to plugs loopholes in international tax treaties by transposing results from the BEPS project into bilateral tax treaties worldwide
- MLI allows governments to modify application of its network of bilateral tax treaties in a synchronised manner without renegotiating each of these treaties bilaterally
- In November 2016, MLI was agreed upon by more than 100 participating jurisdictions**
- MLI came into force on 1 July 2018***
- More than 1,500 tax treaties are expected to be modified
- Till now 89 jurisdictions**** have signed the MLI (30 of these have deposited their instruments of ratification, acceptance or approval [‘ratification instrument’] along with the OECD Secretariat along with its list of reservations and notifications [‘MLI positions’])
June
2019 BEPS global survey
This is the sixth year that Deloitte has conducted the "OECD Base Erosion and Profit Shifting (BEPS) survey." The objective of this annual survey has been to gauge the views of multinational companies regarding the Global Tax Reset and the OECD's Base Erosion and Profit Shifting (BEPS) initiative, and the expected resulting impact on their organisations. The 2019 survey focused on respondents’ views on the topics that were high on the agenda in 2018, such as the Multilateral Instrument, the US Tax Reform and the ‘digital taxation’ debate, in addition to their views on the progress of BEPS related measures.
April
Settlement of Indirect Tax Disputes – Seize the opportunity
GST regime has replaced the plethora of indirect taxes levied by States and the Central Government. However, there is a huge backlog of appeals pending across various levels and under different statutes, both at State and Central level. This has a dual negative impact, on one hand there is a working capital blockage as well as increasing cost of litigation in the hands of the assesse/dealer/taxpayer and on the other hand, thousands of crores of revenue in taxes are blocked for the State and Centre.
Different types of schemes are being announced by various States with the basic objective of mobilizing collection of revenue, mitigating existing litigation and reducing the workload on the departmental staff so as to concentrate on stabilizing GST mechanism.
March
Exploring the new investment world of REIT
Real Estate Investment Trusts (REITs) are companies that own or finance income-producing real estate in a range of property sectors. They provide all investors the chance to own valuable real estate, present the opportunity to access dividend-based income and total returns, and help communities grow, thrive and revitalise.
February
Income-tax Controversies: A Thought Paper
This thought paper deals with the following subjects:
- Intangibles and Disallowance of Advertisement Marketing Promotion (AMP) Spends.
- India Inbound Secondment of Employees: Is it a Case of Rendering Services?
- Digitalised Businesses: Tax Characterisation Issues
- Intra Group Charges: Transfer Pricing Considerations
- Restricting the transfer pricing adjustment only to the value of “international transactions”.
- Situations in which Income Tax Appellate Tribunal (ITAT) can remand back (Sony and Kodak decisions).
- Section 14A disallowances
- Using MAP/APA for non-covered years
- Profit split method – transfer pricing considerations
Each subject briefly describes the issue, the contrary views, challenges, and our thoughts on the same.
Insolvency and Bankruptcy Code
While the Goods and Service Tax (GST) has been widely described as independent India’s biggest tax reform after the economic liberalisation of 1991, the Insolvency and Bankruptcy Code (Code), yet another landmark contemporary law, is just beginning to be assessed for efficacy. Rightly hailed as an important legislative reform, the Code is expected to resolve the prevailing nonperforming assets (NPA) crisis, the resultant logjam in availability of credit, and the consequential impact on growth.
Ind AS 115 - Revenue from contracts with customers
The Ministry of Corporate Affairs (MCA) notified 39 Indian accounting standards (Ind AS) on 16 February 2015. These standards include Ind AS 115, which was converged with the International Financial Reporting Standards (IFRS) 15. Following the deferral of IFRS 15 to 1 January 2018, the MCA also deferred the application of Ind AS 115 on 30 March 2016, and issued Ind AS 11 (construction contract) and Ind AS 18 (revenue recognition).
Glimpses of the Interim Budget 2019
Catch up on important updates and highlights from the India Interim Budget 2019 presented by the government on 1 February 2019. The government has set out a comprehensive ten-dimensional vision to create a modern, technology driven, high growth, equitable and transparent India by 2030. The proposed amendments have been positively received by the industry and the common man. Enhancement of standard deduction for the salaried class and tax exemption for all taxpayers deriving income upto INR 5 lakhs a year will provide some relief to the middle class. The budget also has a range of provisions that factor economic support for the small farmers/marginalised sections. The budget proposal is touted to boost economic growth and demand buoyancy in the economy.
January
Global Powers of Retailing 2019
Welcome to the 22nd edition of Global Powers of Retailing. The report identifies the 250 largest retailers around the world based on publicly available data for FY2017 (fiscal years ended through June 2018), and analyzes their performance across geographies and product sectors. It also provides a global economic outlook, looks at the 50 fastest-growing retailers, and highlights new entrants to the Top 250.
Our digital future - A perspective for tax professionals
The next five years will be a period of significant technological advancement for professional services including the tax arena. It is hard to predict precisely what new developments will emerge but we can look to current and recent trends to guide our predictions for the future digital landscape and the ways in which it will impact the profession.
Issues surrounding business travellers
Global business travellers potentially trigger compliance and withholding obligations. These can be multiple obligations (income tax, social security, immigration, and corporation tax), which can impact at either, or both the individual and the corporate level. Different tests apply to different taxes and places, but broadly all traveling employees making more than just an occasional annual visit increase these exposures.
Deloitte Business Travel Advantage
Deloitte has a dedicated global team working on analytics research and development for our client base across the mobility, talent and rewards subject matter area. We provide a range of services from consultancy to clients who wish to build and maintain their own solutions, through to the deployment of bespoke analytics dashboards and other technology solutions which are designed, built and also maintained by Deloitte. We are able to host secure technology solutions on behalf of our clients, managing the entire process from acquisition of data through to creation of insight support for your stakeholders.
Global payroll management
Over the past decade, international employee movement has significantly grown. With economies, knowledge, capital, trade and technology being highly interconnected, no business can survive without a global connection. Hence, there is a greater need for talent movement to ensure that the right people are available for the required jobs at the right places and at the right time.
Global Tax Reset - Transfer Pricing Documentation Summary
Deloitte's Transfer Pricing practice has prepared the Global Tax Reset - Transfer Pricing Documentation Summary, which compiles essential country-by-country reporting and documentation information (including master file/local file information, if applicable) for 79 jurisdictions around the world.
2018
November
Decoding National Digital Communications Policy (NDCP) 2018
The policy focuses on creating a roadmap for emerging technologies such as 5G, Artificial Intelligence, Robotics, Internet of Things, Cloud Computing and M2M by simplifying licensing and regulatory frameworks and ensuring appropriate security frameworks. Experiments with new technologies are unable to gain momentum because of the regulatory hurdles for operating in India. The policy seeks to remove regulatory challenges and create attractive investment opportunities in new technology segments and stimulate the deployment of new technologies in India.
The policy supports the growth of telecom sector in India which has constantly been in financial crisis. The implementation of the policy will unleash multiple opportunities for telecom service providers, internet service providers, infrastructure providers, handset and equipment manufacturers, satellite communication providers, academic community, the innovators and start-ups.
October
Financial Transfer Pricing Services - Changing Landscape
Consumer businesses are witnessing evolutionary changes in India. Frequent disruptions in the retail, FMCG and e-commerce sectors have become a norm. These evolutions, driven by technology and changing consumer shopping behavior, present lucrative opportunities in the consumer markets not only for traditional players but also for multi-national brands and modern & upcoming consumer companies. The retail, FMCG and e-commerce sectors in India provide a vast scope of improvement throughout their value chains – from sourcing, manufacturing, packaging and distribution to logistics and delivery. The time is thus ripe for witnessing the true potential of growth in this sector.
Consumer LEADS
Consumer businesses are witnessing evolutionary changes in India. Frequent disruptions in the retail, FMCG and e-commerce sectors have become a norm. These evolutions, driven by technology and changing consumer shopping behavior, present lucrative opportunities in the consumer markets not only for traditional players but also for multi-national brands and modern & upcoming consumer companies. The retail, FMCG and e-commerce sectors in India provide a vast scope of improvement throughout their value chains – from sourcing, manufacturing, packaging and distribution to logistics and delivery. The time is thus ripe for witnessing the true potential of growth in this sector.
Emerging trends in BEPS arena
Indian tax landscape has seen radical changes with renegotiation of its tax treaties, introduction of buyback tax, introduction of equalisation levy, limiting interest deduction, phasing-out of tax holidays, introduction of GAAR and, more recently, revision of agency PE definition and introduction of Significant Economic Presence. Follow emerging trends in BEPS arena.
August
July
June
Operational Transfer Pricing
While many companies maintain a firm focus on the "plan," "manage," and "resolve" phases, less emphasis is often placed on the "streamline" phase of the lifecycle, commonly referred to as Operational Transfer Pricing (OTP). Incorrectly recorded outcomes are increasingly a target of tax authorities and the main cause of adjustments in most tax audits. Aligning all elements of the Transfer Pricing lifecycle—policy, documentation, and tax authority interaction—with OTP is essential.
April
Febraury
Know Your Budget 2018 - Detailed analysis
The Government’s agenda of ‘Transform, Reform and Perform’ in the budget focuses on implementation of the recent reforms. Hence there are no big bang announcements. The budget addresses needs of agricultural sector and MSMEs, through which agenda of inclusive growth, formalization of economy and boost employment generation is targeted to be realized. The FM’s promise of reducing corporate tax rate from 30 percent to 25 percent for companies remains limited to the MSMES leaving the large tax payers to wait for another year. However, 99% of MSME’s with turnover of upto Rs 250 crores would benefit from the rate reduction. Unfortunately, the large corporates will now carry a slightly higher tax burden from an increase cess of 1 percent. Rationalization of Long term capital gain taxation may be inopportune in terms of timing as their ability to raise funds through IPOs and FPOs may be impacted due to market sentiments changing.
Union Budget 2018 | Glimpses
The Government’s agenda of ‘Transform, Reform and Perform’ in the budget focuses on implementation of the recent reforms. Hence there are no big bang announcements. The budget addresses needs of agricultural sector and MSMEs, through which agenda of inclusive growth, formalization of economy and boost employment generation is targeted to be realized. The FM’s promise of reducing corporate tax rate from 30 percent to 25 percent for companies remains limited to the MSMES leaving the large tax payers to wait for another year. However, 99% of MSME’s with turnover of upto Rs 250 crores would benefit from the rate reduction. Unfortunately, the large corporates will now carry a slightly higher tax burden from an increase cess of 1 percent. Rationalization of Long term capital gain taxation may be inopportune in terms of timing as their ability to raise funds through IPOs and FPOs may be impacted due to market sentiments changing.
Union Budget 2018 | Understanding the impact on Foreign Portfolio Investors
The Indian Finance Minister presented the Union Budget 2018. The budget was presented against the backdrop of slower economic growth, rising crude oil prices and growing protectionist tendencies in some countries. The GDP growth for the current fiscal year (April 2017 to March 2018) is estimated to be around 6.5% as compared to the growth rate of over 7% registered in last 3 financial years. The slower economic growth is generally attributed to the recent bold reforms undertaken by the government including implementation of Goods and Services Tax (GST) regime to replace the multiple indirect taxes and demonetization of higher currency notes aimed at removing black money from the economy.
Union Budget 2018 - Base Erosion and Profit Shifting
For past few years, the Organisation for Economic Cooperation and Development [OECD] and G20 countries have actively worked on the base erosion and profit shifting [BEPS] project. BEPS refers to tax planning strategies that exploit gaps and mismatches in tax rules to make profit ‘disappear’ for tax purpose or to shift profits to locations where there is little or no real activity but taxes are low, resulting in little or no overall corporate tax being paid. In light of several such instances resulting in BEPS, the G20 and OECD released their recommendation on 15 BEPS action plans (15 action plans) on 5 October 2015.
International Tax Review - Intangibles Guide
Welcome to International Tax Review’s guide to intangible assets, published in association with Deloitte. Intangible assets are as central to the business function as steam-powered machines were during Industrial Revolution. Despite the evolution of businesses since the 18th century, modern business is still governed by historic tax laws.
2018 BEPS global survey
This is the fifth year that Deloitte has conducted the "OECD Base Erosion and Profit Shifting (BEPS) survey." The objective of this annual survey has been to gauge the views of multinational companies regarding the Global Tax Reset and the OECD's Base Erosion and Profit Shifting (BEPS) initiative, and the expected impact on their organizations. The 2018 survey focused on understanding how multinationals' perspectives on BEPS and the tax landscape have evolved. The final 2018 survey results are below.
Full and summary survey results are available for download
Summary 2018 BEPS survey results
2018 BEPS survey results white paper
US Tax Law Reform – An Overview
On December 22, 2017, the US President signed into law a massive tax reform package which lowers tax on companies, pass-through entities, individuals, and estates and move the US toward a participation exemption system for taxing foreign-source income of domestic multinational corporations.
