News:- Rangachary suggests slew of benefits for IT industry Though the finance ministry has suggested the taxman may still apply the profit-split method (PSM) to local R&D centres of MNCs, albeit in a much more restricted form, the Rangachary committee on this opposed it, saying it is “impracticable to apply PSM”. On Sunday, the CBDT had clarified PSM could be used if the R&D centre was, for instance, sharing risks but Rangachary has said that since it is difficult to ascertain sharing of risks, it is best not to use PSM.The finance ministry is expected to come out with its view on the report soon. The committee has also come out against the taxman in a variety of other cases. In several cases, the taxman has opined that on-site work being done by a local IT firm cannot be considered as an export and is therefore ineligible for export benefits. The committee is of the view (see box) that this benefit has to be extended. Since there are several such cases in SEZs where such benefits have not been given, if the government accepts the recommendation, it will come as a big relief to industry. Source:- financialexpress
Posted on: Tue, 02 Jul 2013 12:11:43 +0000
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