Services companies have been dealt a twin blow: Unpaid bills, & GST liabilities on incidents on non-payment.
Currently, India levies 6% tax in the form of equalisation levy on digital companies advertising revenue.
The AAR Mumbai bench’s decision means other investments that were routed through Mauritius too could come under the scrutiny of tax authorities in India if the investors seek to claim benefits under the grandfathering clause. This clause allows investors to seek tax exemption on investments made prior to 2016.
Many partners of larger professional services firms like Deloitte, PwC, EY and KPMG and magic circle law firms are experiencing for the first time the downside and risk that comes along with the ‘partner’ tag. Like in one of the big four firms, partners were told that their bonuses —often 20% to 40% of annual salaries—will be added to the working capital of the firm and they will be given 7% interest on that amount.
Companies like Infosys, Flipkart, Deloitte, PwC, EY and KPMG are using tools like thermal cameras, face detection software and infrared thermometers to welcome employees. Several companies have created their own applications aimed at helping employees.
Vendors face indemnity papers, blocked payments as firms try to ringfence them from defaults.
The possibilities include listing some of their Indian entities or creating a holding structure outside India. These companies and their tax consultants are studying ways to minimise their tax outgo, experts said.
Amidst liquidity crunch due to Covid, businesses face risk of frauds, round tripping and evergreening of loans: PwC report
Unstable cashflows and low reserves, coupled with a restricted ability to seek additional debt or equity financing, can create immense pressure on businesses to divert funds between entities for non-permissible or surreptitious purposes, said the PwC report titled ‘Rethinking Fraud and Economic Crime.’
Tata Sons, PepsiCo, Flipkart, Walmart, Vivo India, Larsen & Toubro and TikTok, among others, came forward to donate ventilators, personal protection equipment, masks, medical gowns and testing kits.
Companies see impact on future revenues, costs and contracts due to Covid-19 crisis
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