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Changes in the FDI Policy

Global Tax Update:May 2016/India

The Government of India has amended the consolidated FDI policy to increase the limit of investment in the insurance and pension sectors and to clarify certain aspects relating to e-commerce sector. (Global Tax Update:May 2016/India)

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This newsletter explains the following topics;

1. Changes in the FDI Policy

The Government of India has amended the consolidated FDI policy to increase the limit of investment in the insurance and pension sectors and to clarify certain aspects relating to e-commerce sector.

2. CBDT clarifies that consortium arrangements for executing EPC / turnkey contracts, with certain specified attributes, may not be treated as an AOP

Taxation of consortium of contractors, formed to implement large infrastructure projects, particularly in EPC contracts/ turnkey projects has been a subject matter of tax litigation in India. Tax authorities in many cases have taken a position that such a consortium arrangement constitutes an AOP, i.e., a separate entity for charging tax. This has led to tax disputes, particularly in those cases where each member of the consortium, although jointly and severally liable has a clear and distinct role in scope of work, responsibilities and liabilities of the consortium members.

 

>> Click for Japanese [対内直接投資政策の変更 ほか]

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