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2010 (3) TMI 118 - AAR - Income TaxAOC proposes to establish an office in India (‘Indian office’) for undertaking procurement support activities for its head office and/or Saudi Aram Co. The Indian office will undertake procurement support services for the purpose of export outside India of various goods/products required by Saudi AramCo e.g. steel pipes, pipe fittings, steel valves, process vessels, heat transfer equipments, electrical equipments etc. These products will be utilized by Saudi AramCo in its business as fixed assets or as consumables. Indian office proposes to render the certain services in relation to procurement of goods from India. The Indian office will not undertake any other business function of AOC or any of its group companies. The Indian office will be funded entirely by reimbursements received by it from its head office without any profit element thereon. Held that: If the applicant itself is the purchaser of goods exported from India, the applicant can claim the benefit of cl.(b) of Explanation 1 to Section 9(1)(i) of the Act. Otherwise, it cannot. In other words, if the purchasers are non-residents other than the applicant, the applicant is liable to pay tax in India on the amount received by it for the support services rendered through the branch office in India. The question is thus answered partly in affirmative and partly in negative.
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