India Desk News Alert - Archive

March 2009



PricewaterhouseCoopers’ India desk in Singapore is pleased to bring you the latest changes and developments in India's tax and regulatory system relevant for doing business in India.

1) External Commercial Borrowing policy partially modified

The External Commercial Borrowing (ECB) policy is regularly reviewed by the Government of India in consultation with the Reserve Bank of India to keep it aligned with the evolving macro-economic situation, changing market conditions, sectoral requirements and the external sector. Pursuant to such review, the ECB policy has been partially modified.

2) Foreign Direct Investment (FDI) Policy update

The Department of Industrial Policy and Promotion (DIPP), Government of India has released two Press Notes amending the FDI policy in respect of sectors where caps / conditions apply for FDI.

We hope you find the updates useful. Our India Desk at PwC Singapore in association with PwC India can advise you on such issues as well as other Indian fiscal/regulatory developments which may need to be considered to achieve overall tax efficiency and structuring of your investments into India.

If you have any queries regarding these updates and/or other tax or regulatory issues, we welcome you to contact us:

November 2008

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PricewaterhouseCoopers (PwC) Singapore's India desk is pleased to bring you the latest changes and developments in India's tax and regulatory system relevant for doing business in India.

1) External Commercial Borrowing policy partially modified
The External Commercial Borrowing (ECB) policy is regularly reviewed by the Government of India in consultation with the Reserve Bank of India (RBI) to keep it aligned with the evolving macro-economic situation, changing market conditions, sectoral requirements and the external sector. Pursuant to such review, the ECB policy has been partially modified.

2) Ruling by the Mumbai High Court
We are pleased to enclose a recent Ruling by the Mumbai High Court in the case of SET Satellite (Singapore) Pte Ltd. where the Court has held that if correct arm's length price (ALP) is applied and paid to its dependent agent then nothing further would be left to be taxed in the hands of the Foreign Enterprise.

We hope you found the updates useful. Our India Desk at PwC Singapore in association with PwC India can advise you on such issues as well as other Indian fiscal/regulatory developments which may need to be considered to achieve overall tax efficiency and structuring of your investments into India.

If you have any queries regarding these updates and/or other tax or regulatory issues, we welcome you to contact us.

June 2008
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As India forges ahead in attracting foreign direct investments, it is imperative for all foreign investors to be aware of the latest changes and developments in India's tax and regulatory system. Outlined below are some of the key developments:

1) External Commercial Borrowing policy partially modified
The External Commercial Borrowing (ECB) policy is regularly reviewed by the Government of India in consultation with the Reserve Bank of India (RBI) to keep it aligned with the evolving macro-economic situation, changing market conditions, sectoral requirements and the external sector. Pursuant to such review, the ECB policy has been partially modified.

2) Setting up of an office in India proposed to be streamlined
With a view to streamlining the setting up of a Branch Office and Liaison Office in India by foreign entities, the Reserve Bank of India (RBI) proposes to change the regime with effect from 1 July 2008.

3) Ruling by the Authority for Advanced Ruling
Enclosed is a recent Ruling by the Authority for Advanced Ruling on taxability of income arising sale of brand, trademark and brewing intellectual property by Foster's Australia Limited to SAB Miller in India.

June 2007
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As per the provisions of the Income-tax Act, 1961 [‘the ITA’], ‘business income’ and ‘capital gains’ are subject to tax at different rates of tax. The provisions of the ITA do not lay down clear criteria for determining the characterization of income, but certain generic principles have evolved out of the judicial precedents and administrative dispensation.

Earlier in 1989, certain tests were laid down by the Central Board of Direct Taxes [‘CBDT’] to distinguish between shares held as stock-in-trade and shares held as investment. The CBDT then issued draft supplementary instructions on May 16, 2006 to provide further guidelines for determining whether a person is a trader in stocks or an investor in stocks, and had included fifteen indicative criteria in this determination and had invited public comments thereon. The CBDT has now issued a Circular no. 4/2007 dated June 15, 2007 in this regard.



May 2007
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The Department of Economic Affairs attached to the Ministry of Finance (Government of India) has recently revised the guidelines for foreign investment in Indian Companies through the medium of preference shares. The revised guidelines are provided for your ready reference in the attached PricewaterhouseCoopers (PwC) Newsflash.






We hope you found the updates useful. Our India Desk at PwC Singapore in association with PwC India can advise you on such issues as well as other Indian fiscal/regulatory developments which may need to be considered to achieve overall tax efficiency and structuring of your investments into India.

If you have any queries regarding these updates and/or other indian tax or regulatory issues, we welcome you to contact us.