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II. International Taxes Case Law:
1. Volkswagen Finance Pvt Ltd V. ITO(IT), ITA No. 2195/Mum/2017, Date of Judgement: 19.03.2020, ITAT - Mumbai
Whether
payment made by and Indian Company to a Non-Resident entertainer for
appearance in an event held abroad, but the purpose of such event was to
promote business in India will construe to be business connection of
the Non-Resident in India u/s 9(1)(i) of the Act?
Held: Yes
Facts:
The assessee is an Indian Company which paid $4,40,000/- to Nicholas
Cage (a tax resident of USA) for an appearance made by him at Dubai
(UAE) in a product launch event of the product Audi A-8L, for promoting
business of the assessee in India. Also, the assessee paid other
incidentals such as costs of two return first class airline tickets from
Los Angeles, costs of stay and local transportation in Dubai, and costs
of hair and make-up of the celebrity. In respect of such celebrity
appearance the assessee did not withhold any tax from the said
remittance. It was found that an entity by the name of Audi India, a
division of Volkswagen Group Sales India Ltd, and the assessee jointly
planned an event in Dubai for launch of Audit A8L facelift model. As a
part of the agreement the celebrity was to be driven into the venue as
passenger in the new Audi 8L as a part of the unveil process, engage
with the Audi India Director in a short Q&A session, join the Audi
India director in socializing with the guests at the event. This model
is imported from Germany as a completely built unit with customization
in line with customer's requirements. It takes around 4-5 months for
cars to be shipped from Germany to India. New model of Audi A8 was
available in Dubai and hence the launch event was planned in Dubai for
showcasing to potential customers. Audi India a group Co. had flown
about 150 people mostly prospective buyers and some journalists to the
launch ceremony. Majority of the customers were HNI or existing
customers already driving a different variant of the Audi car.
Held:
The Hon'ble ITAT held that the business models are constantly
evolving, and as the rapid communication modes such as internet and
social media have completely transformed the way businesses communicate,
it is time that the law is seen in tandem with the ground realities of
the business world, rather than in the strict confines of what was
decided in the judicial precedents, in the context of a different
business world when these ground realities did not exist. Today, virtual
and intangible business connections are perhaps far more critical and
important than the traditional business connection. Moreover, once the
expenses for holding this event is in connection with business in India,
it is only a natural corollary that income from participation to a
non-resident has a business connection in India u/s 9(1)(i) of the
Income Tax Act, 1961.
(Please click here for judgment)
[ Contribution by CA. Rishabh Agarwal]
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III. GST Case Law:
1. Prasar Broadcasting Corporation of India (All India Radio), Shimla, Advance Ruling No. HPGST- /2019-10 Dated: 19-05-2020
Facts of the Case
The
Applicant is a public service broadcaster. The taxpayer avails
services of hiring taxis for the undermentioned purposes:
To pick up/ drop shift duty-staff in odd hours.
This facility is being provided in odd hours to lady-employees, handicapped & general employees.
Taxis are hired for tour/OB recordings etc. within the state of Himachal Pradesh on different occasions.
Taxis
are also hired to drop shift staff at High Power Transmitter during
morning/ evening & for office work during day time.
The
question raised by the applicant is whether input tax credit is
available to the applicant on the services availed for the
aforementioned items through contractors and of GST will be applicable
on the same.
HELD
The applicable rate of tax renting of cab is 5% (With limited ITC of
input services in the same line of business) and 12% with full ITC.
If
the transportation facility provided to the employees is not obligatory
under any law for the time being in force, then NO ITC is available to
the employer. However if the transportation facility provided to the
employees is obligatory under any law for the time being in force, then
FULL ITC is available to the employer subject to the conditions laid
down in Section 17(5) (b) of The CGST Act, 2017.
(Please click here for Order)
[ Contribution by CA. Vijay Gupta] |
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