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A recent deal between Jet Airways and Etihad Airways, valued at $379 million, forms part of the government's new policy to encourage foreign direct investment in India. It is hoped that the infusion of foreign direct investment into civil aviation will result in improvements to the economy, a growth in traffic at Indian airports and the creation of job opportunities.

Corporate Tax


The Supreme Court recently ruled on the criteria for determining whether a contract is a works contract or a sales contract. The decision will help to resolve a significant amount of pending litigation and will have a significant financial impact on the elevator industry.

In furtherance of the final safe harbour rules issued by the Central Board of Direct Taxes in September 2013, the board has now issued a letter in which it put forth certain significant directives and clarifications regarding the implementation of the safe harbour rules. Although the letter is insufficient to clarify all the issues pertaining to safe harbour, it is a welcome step by the government.

The Bombay High Court recently considered a challenge to an assessment order by a petitioner on the grounds that the order was given in violation of the remand order of the Income Tax Appellate Tribunal. The assessment order was further challenged on the grounds that the principles of natural justice had been violated, as the assessee had been given less than 24 hours to respond to the notice requiring it to prove its eligibility.

The Madras High Court recently considered whether import and interstate lease transactions were subject to tax if the lease agreements for such transactions were entered into before the provision enabling the government to levy tax on such transactions was introduced. The court ruled that all lease rentals realised after the amendment to the act would attract tax, irrespective of the date of the lease agreement.

A circular issued by the Central Board of Excise and Customs states that credit for service tax paid on the transportation up to a place of sale would be admissible if it could be established by the claimant that the sale and the transfer of property in goods occurred at the place at hand. However, following an amendment to the Credit Rules, the application of this tax has been under dispute. Several courts have set out their views.

The Customs, Excise and Service Tax Appellate Tribunal recently determined the applicability of service tax in relation to Sodexo meal vouchers sold by the appellant under the taxing entry for business auxiliary services. The tribunal argued that the tax should apply as the restrictions imposed on employees redeeming the vouchers were tantamount to promotion of the goods and services of the appellant's affiliates.

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International Trade


The addition of royalty payments to the assessable value of imported goods has long been a contentious issue. In a recent case, it was held that the lump sum royalty paid to the supplier for the grant of cinematic rights, television rights and video rights of films and programmes could be included in the assessable value of the master tapes of the films and programmes.

The High Court recently ruled that the department has no power to adjudicate in respect of property held by a person other than the defaulter. The case involved a defaulter who had failed to pay anti-dumping duty on goods imported by him in the course of his business. In response, the department imposed a restraint order with respect to property held in the name of the defaulter's wife and children.

The Customs, Excise and Service Tax Appellate Tribunal recently observed that when an appellant discharges its duty liability as a 100% export-oriented unit, it is no longer entitled to claim the benefits available to such a unit. However, the benefits available to a domestic tariff area unit would now become available to the appellant. Accordingly, the appellant was allowed to file shipping bills under the drawback claim.

In a recent High Court case, the appellant – a manufacturer of iron, steel and allied products – imported certain raw materials classified under a customs tariff heading that deemed them exempt from customs duty. However, at the time of import, while provisionally assessing the goods, the superintendent of customs changed the classification of imported goods, which resulted in a 5% increase in duty liability.

The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal recently ruled that the customs authorities cannot demand duty from exporters in relation to any irregularity noticed by them in the context of an export scrip, as such matters instead fall within the purview of the Directorate General of Foreign Trade. The case concerned an exporter of frozen and fresh chilled meat.

The definition of the term 'group company' under the Foreign Trade Policy has been amended to include a limited liability partnership (LLP). The amendment will have a considerable impact since, under the policy, group companies have been allowed to claim benefits or have their exports counted as benefits to be claimed by another group member, under certain export promotion schemes notified in the policy.

More updates >



The Bombay High Court recently considered whether the requirement to hold shareholders' meetings under the Companies Act 1956 can be dispensed with and substituted by electronic voting and postal ballot under Section 110 of the Companies Act 2013. The court's final determination is pending, but an order has been released which provides the court's prima-facie views.

The Supreme Court was recently required to consider whether the comptroller and auditor general is competent to conduct an audit of the accounts of private companies. The court stressed that the comptroller and auditor general's powers do not include carrying out a statutory audit of service providers' accounts, but are limited to ascertaining whether the union is getting its legitimate share by way of revenue sharing.