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Tax Publishers
Taxability of offshore supply of equipments
Facts:
Assessee a tax resident of China was in the business of
supplying insulators and optic fibre ground wire. They had supplied goods worth
14.28 crores to PSU's on CIF basis at offshore destination in Chinese ports.
Besides this there was onshore business as well which was outsourced to one ZTT
India Pvt. Limited. Revenue's plea was on the offshore delivered goods
wherein, basing earlier year orders they went on to bifurcate 60% as business
income and 40% as fee for technical services and taxed both in India citing
that the assessee was fully responsible for the entire activity on turnkey
basis. On higher appeal the DRP upheld the views of the AO. On further appeal -
Held in favour of the assessee that if goods were delivered
offshore no part of that income can be taxed in India. The earlier year orders
stood annulled by the ITAT factually and thus revenue was wrong in applying the
same to the year under appeal as well.
Ed. Note: The entire
commentary on earlier year order makes it a worthwhile reading.
Case: Jiangdong
Fittings Equipments Co. Ltd. v. ACIT 2024 TaxPub(DT) 1196 (Del-Trib)
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