In a recent decision by the Karnataka High Court (HC) on taxability of software sale and related tax withholding obligation towards payments to non-resident, the HC ruled that it is obligatory to withhold tax on such payments. Disposing a batch of appeals filed by the Revenue, the Court held that in absence of a &lsquo;nil&rsquo; withholding order, the payer is obliged to withhold tax, even if the payment is later held to be not taxable on finality of assessment by the Revenue.

K'taka HC decision sharpens Revenue's teeth

Business Standard

The Finance Act, 2009 inserted a new section 144C in the Income-tax Act providing an alternate mechanism to resolve tax disputes of the foreign companies expeditiously. The Finance Minister, taking cognizance of delays, which take place in any tax litigation, declared in the parliament that &ldquo;The dispute resolution mechanism presently in place is time consuming and finality in high demanding cases is attained only after a long drawn litigation till the Supreme Court. Flow for foreign investment is extremely sensitive to a prolonged uncertainty in tax-related matter. Therefore, it is proposed to amend the Income-tax Act to provide for alternate dispute resolution mechanism which will facilitate expeditious resolution of disputes in a fast track basis&rdquo;.

Panel to curtail tax litigation for foreign firms

The dual GST is an inflexion point in India&rsquo;s fiscal landscape and marks a transition from the existing origin-based to a destination based taxation regime. The introduction of the dual GST is expected to remove the present problem of tax cascading by moving to a common tax base and by subsuming various Central and state taxes and levies into the Central Goods and the Services Tax (CGST) and State Goods and Services Tax (SGST) respectively.

Dual GST will impact supply chains

It has not been clear in recent weeks as to where exactly the government stood on the climate change negotiations, with different spokesmen pushing different lines of argument. The prime minister has now put all speculation to rest with his statement at the Commonwealth summit, asserting that India wants the Kyoto framework (which places differential responsibilities on rich and poor countries) to be made to work, and linking India&rsquo;s domestic emissions control plan to the promised transfer of technology and resources from the rich countries. He has also opposed the western move to downgrade the agenda for the forthcoming Copenhagen summit, and made it clear that India has a vital stake in serious emission cuts being achieved internationally. Meanwhile, in Beijing, four leading developing countries have announced that they will act together at Copenhagen, thus making it clear that the rich countries will not be allowed to steamroller the rest.

Carbon lines in the sand

Murphy&rsquo;s law is at work in the global financial and realty markets. If something can go wrong, it will. No one who is familiar with the facts of Dubai&rsquo;s boom and its global dimension ought to have been surprised by the debt crisis that has hit Dubai World. For the last one year, there have been far too many stories coming out of the region on real and potential bankruptcies, plans being shelved, excess capacity and inadequate demand. The global financial crisis and the rollback in oil prices in 2008 were largely responsible for this. However, for the same reason, the moderation of the global slowdown and the recent rise in oil prices have helped improve sentiment in the region. Lack of transparency, poor management of a financial problem and the long weekend seem to have done more to spook the markets than the real size of the problem itself.

The Gulf in Dubai

In 1928, with the future of the pound sterling uncertain, France was concerned about its sizable sterling deposit with the Bank of England. &ldquo;To avoid trouble for the City of London&rdquo;, British Foreign Secretary Sir Austen Chamberlain entreated French Prime Minister M Poincar&eacute; not to ask for gold, which France could do under the gold exchange standard. France partially acceded to the request.

Ashok K Lahiri: The rise of renminbi

Global investors and lenders will vet the proposals for construction and infrastructure projects in the Middle East more cautiously. That can mean less money flowing into the Middle East and consequently slowing or abandonment of many projects, especially the construction projects. Indian project exporters implementing construction contracts in the region may have to cope with delays and defaults, and drying of fresh contracts for some time. Some of their ongoing projects may not be completed. Some may find it difficult to raise capital or short-term borrowings. This can result in serious cash flow disruptions. The project exporters will need long-term finance to cope with such disruptions.

Jolt for West Asia trade

Less than a fifth of all open offers since 2006 have succeeded.

Sunil Jain: Not quite an open and shut case

China will celebrate the 60th anniversary of its Communist regime today. The government is putting on a huge show, but the significance of the display of power and grandeur has more to do with the country&rsquo;s future than its past, which has been patchy and violence-ridden even as the country has taken phenomenal strides to its present position.

Inflection @ 60

The principle of the Right To Information, once established and accepted, opens up a wide range of practical applications. There are, however, many potential areas of information usage for better management for which the data are already there, although perhaps not in an easily accessible form.

Shyam Ponappa: Beyond RTI - The use of information

Associations with board-level representation may sound radical but they aren't such a bad idea.

Kanika Datta: Handling management grievances

A week ago, Roy George, the 46-year old HR head at automotive components firm Pricol, was beaten to death in his office by iron bar-wielding workers. While the company claimed that the violence was instigated by left-wing trade union leaders linked to the Naxals, the unions blamed the attitude of the management over the past two years that led to the violence.

Shyamal Majumdar: India Inc&#39;s labour pains

Popular wisdom has it short-term electricity trades account for just 2-3 per cent of the total generation in the country, and so there is little need to regulate their prices. Whatever the view on whether price caps exacerbate the shortage or not (especially if, as is the case right now, the price cap of Rs 8 is higher than the cost of production), it is useful to get some perspective on the numbers.

Sunil Jain: Electrifying

A look at the Sensex value doesn&rsquo;t give you the correct picture since what matters is the earnings outlook for companies. It would be incorrect to assume that the markets are cheaper when the Sensex is at 15,000 or that they are more expensive when it is at 20,000. That&rsquo;s because a market is valued according to the estimated future growth in profits of companies.

Shobhana Subramanian: Is the market overvalued?

The generally accepted view is that the government runs a bloated bureaucracy. Its current employee strength is 3.32 million. But over 80 per cent of this number is accounted for by specific service departments: posts, central police forces and the railways. Logically, these should not be counted as part of a &ldquo;bureaucracy&rdquo;, which as a consequence stands reduced to a relatively modest 600,000. Since the overwhelming majority of even that consists of clerical and support staff, the operational part of the government is quite simply too small. In almost any direction one looks, there is a shortage of the required people. India has too few judges, one of the smallest foreign offices in the world, overworked officials dealing with trade negotiations in the commerce department, and desperate under-staffing at regulatory bodies in charge of areas like pollution control and drug safety.

Fat in the wrong place

There is something fascinating about Apple. It isn&rsquo;t the biggest brand, yet it is the most talked about. The power of the brand comes from its products, and its owner Steve Jobs. From the Macintosh launched in 1984, it has given the world a series of products that have delighted consumers by bringing aesthetics to a functional technology category.

Madhukar Sabnavis: Adbhuta rasa in advertising

More than any major political party or radical Left Front, it is documentary filmmakers who have emerged as the biggest adversaries of Gujarat Chief Minister Narendra Modi. An impressive body of anti-Modi films accumulating since 2002, are now a ubiquitous part of the &lsquo;documentary festival&rsquo; circuit, delivering compact body blows to the reputation of Hindutva&rsquo;s puffed up poster boy.

Sadanand Menon: The mounting filmic attack on Modi

After a long, long time, we seem to be back to a real market. By this I mean a reasonably divergent set of views on most economic and market variables, starting with the US recovery.

Jamal Mecklai: The calm after the storm

Weddings are emotional events, and the days and months leading up to them typically times of very special family togetherness. The process of conceptualising, organising and implementing the ceremony, the fact that a son or daughter is going off to start a whole new family, the enthusiastic opinions of pretty much anyone with a mouth and tongue &mdash; all of it guarantees a precious kind of bonding and a good deal of blood on the flower arrangements.

Heaven&#39;s choicest blessings

The People&rsquo;s Republic of China marked its 60th birthday with a show of manpower. It was as spectacular and heartless as the opening ceremony of the last Olympics. These extravaganzas may be doing the nation a disservice abroad, by reinforcing stereotypes of the Chinese as obedient, mass-produced, and invisible as individuals; collectively, able to achieve feats of engineering and display; separately, merely well trained. What an appalling public relations burden to carry! At least India and Indians are defined in the foreign imagination by chaos, layers and infinite variety, which seems somehow more human and forgivable.

Hello, China

The war against Maoists is going to take up many headlines quite soon. A determined home minister is evidently getting ready to step up the battle in what the Prime Minister has declared to be the most serious domestic security problem the country has ever faced (hence more serious than either Kashmir or Punjab or the north-east). The action seems likely to be focused on the heartland states of Chhattisgarh and Jharkhand, which Mr Chidambaram visited the other day.

T N Ninan: A grim challenge

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