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  #1  
Old September 9th, 2008, 02:36 PM
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Thumbs down Stupid Tax Policies of Indian Govt - Payments to foreign companies by call centers ta

Once more our stupid tax policies and stupidity of our government bureacrats shines

Imagine you are living in India and have a webserver installed in the USA. Now you sell books or whatever in India via this website. The items you sell are procured in India and sold in India, thus being taxed in India. Your profits are also charged in India.

Now imagine the Indian Income Tax department asking you to pay tax on the webserver hosting 'fees' which you pay in the USA.


Quote:

Payments to foreign companies by call centers taxable in India

Date: Monday, September 08, 2008

New Delhi: India's taxation scope is reaching out to encompass foreign companies providing services to the domestic call centers from their overseas offices. The Income Tax Appellate Tribunal (ITAT) has made it clear that the foreign companies who provide connectivity and technical services to the domestic call centers from their overseas offices will be taxed in India.

The tribunal said, "The transaction clearly falls under the definition of 'royalty,' and royalty payment to NRI is deemed to accrue and arises in India and therefore payment is subject to tax deducted at source". As it was clarified that it is a responsibility of every firm availing such services to deduct TDS despite the location of the firm's equipments.

The decision was triggered by two cases filed by Hyderabad-based Frontline Software and Call World Technology. The services were taken from IGTL Solutions and True Dial Technologies to generate and also cater to the outbound PSTN calls within the U.S. through the equipments of the foreign companies. In these cases, the Indian based firms did not deduct any TDS while making the payments as the entire activity took place in U.S. But the court gave out its verdict in favor of the Commissioner of Income Tax (appeals). They considered that the payments made to the U.S. firms, is nothing but royalty. As per the decision the domestic call centers have to make the payments deducting the liable income tax of the foreign companies at the source.

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Old September 9th, 2008, 06:40 PM
jammy69 jammy69 is offline
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Re: Stupid Tax Policies of Indian Govt - Payments to foreign companies by call center

Ye saale Income Tax waale pagal ho gaye hai.Sala as it is on a estimate we people pay 73% of our income in dierct and indirect tax.Now it will be more becz many of the people use internet for transcation and even i do that too.Abhi thode din mein going to a bathroom will be taxed too echarcha bhai sawdhaan
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Old September 9th, 2008, 06:57 PM
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Re: Stupid Tax Policies of Indian Govt - Payments to foreign companies by call center

Quote:
Originally Posted by jammy69 View Post
Ye saale Income Tax waale pagal ho gaye hai.Sala as it is on a estimate we people pay 73% of our income in dierct and indirect tax.Now it will be more becz many of the people use internet for transcation and even i do that too.Abhi thode din mein going to a bathroom will be taxed too echarcha bhai sawdhaan
Just when India is becoming more stable and growing, our idiot bureaucrats come up with such short sighted and detrimental policies.

jammy bhai, agar bathroom mein jaakar sandaas karne pe tax lagaya to main raste pe kar doonga. Raasta to public place hain.. aao jaao hagg do
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Old September 9th, 2008, 07:06 PM
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Re: Stupid Tax Policies of Indian Govt - Payments to foreign companies by call center

@echarcha the way it is they might tax u the amount of water you use in bathrooms and all.As it is in mumbai i m paying tax on my electricty bill which is above the minimum limit.trust me the minimum limit will expire even if u just light a bulb and a fan with a TV.sala jidhar dekho udhar tax.
Waise for that matter i guess my society is already paying water tax on the water bills .
echarcha pai repped u for that
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