Goods and Service Tax (GST) Of the various taxes applicable to the businesses, one that is directly linked to the top line of a business, though known as indirect tax, is Goods and Service Tax (GST). It is also one of the major contributors to the revenue of the government.

GST as a law has subsumed various indirect taxes which makes it a complex law to implement and understand. Ever since the GST has been implemented from July 2017, the law has seen various amendments, notifications, advance rulings, and clarifications being issued by the authorities to incorporate various procedures and practices to ensure smooth implementation and address the concerns of the industry.

The law has been drafted in a way that it takes care of the interest of the state government and the central government. The law prescribes four rates of taxes, which are charged based on the nature of goods and/or services. Law further classifies the applicability of taxes based on the nature of transaction and the place of the transaction as intra-state transaction or inter-state transaction.

Post implementation of GST, there are still taxes of the previous tax regime that are applicable, in addition to GST. For example, customs duty continues to be levied on imports while such imports are also subject to GST.

b) Income Tax

Income tax, also known as direct tax, is a tax levied on the net profits of the
business, subject to adjustments as prescribed in the respective tax laws. A business entity is liable to income tax on the basis of various factors, of which the primary bases of charging tax are the residential status of the business or the promoter, source of income, place of management of the business and control of business etc.

The income tax law lays down the provisions which serve as a guiding principle for taxability of income earned within and outside the country of origin. The provisions which lay down the principle for taxation of income earned overseas are grouped under international tax provisions.

Our dedicated and efficient team of tax professionals help businesses decipher both domestic and international tax provisions. We advise clients on the applicability of the respective tax provisions for their businesses. We help them in filing the tax returns and reports on time.

i. Domestic taxation

Domestic income tax provisions lay down the principles that govern the
taxability of various sources of income earned in the domestic country. The provisions include the rates of taxes applicable to different tax entities, incomes which would be liable to deduction of tax at source, income that would be exempt from tax, deductions allowable from computation of income which will be subject to tax, applying for tax exemption certificates etc.

The tax law also provides for tax exemption, that is non-taxability of income earned by start-up entities as well as businesses that are established or set up in the areas recognised by the regulations.

Our capable team of tax experts not only advice on all the above aspects but we also bring to the attention of the businesses and promoters, applicable tax provisions and the tax liability that may arise in current or proposed future transactions.

We also represent our clients in tax disputes before the tax authorities. We also provide the services of obtaining tax registrations for the client businesses and we also take care of filing tax returns and reports for the clients within the prescribed timelines.

ii. International Taxation:

It is rightly said that the world today has become global village and geographic boundaries does not act as barriers now. As the people have moved across borders with ease, so have the businesses grown and diversified into different parts of the world.

As the businesses have grown multinational so has the need for legal compliance in accordance to the laws of the different countries. It is important that the businesses comply with the tax laws of the land where the business is being run as well as of the country in which the business is registered as noncompliance entails huge financial impact and threatens the existence of the business in that particular country.

Our network of tax consultants assists local businesses by advising them on various aspects of statutory compliance for establishing businesses overseas as well as international businesses seeking to establish their business in India.

iii. Transfer Pricing:

Transfer pricing represents the price charged internally for the sale of goods or provision of services within the business divisions of the same company. It also represents the price charged by a holding company to its subsidiary company or vice versa.

The transfer pricing provisions stipulate that the price charged among the
business entities or business divisions under the same management and control should be based on prices prevailing in the market.

Our experience and competent network of professional accountants, tax
practitioners, financial analysts and lawyers advice and offer essential local knowledge regarding transfer provisions of the respective countries to corporations. We help developing and implementing economically sustainable transfer prices, documentation and guide in responding to challenges from the tax authorities.

The transfer pricing provisions and practice are made applicable to crossborder transactions as well as domestic transactions with the business divisions and business entities under common management and control.

Almost every country has incorporated transfer pricing provisions in the tax laws which needs to be complied with by the companies operating within their jurisdiction. As more countries are adopting Transfer Pricing Regulations which includes mandatory documentation, they are becoming more complex in
nature.

Transfer pricing controversies arise when one of the countries in which the business entity has operations claims that the prices being charged does not corroborate with the market prices. Such Transfer pricing controversies are expensive and time-consuming for the business and often result in double taxation of income.