The indirect tax department wants the software companies to value the global brand, names and logos used in india. charge a fee on that and pay 18% goods and services tax on top of that.
Industry trackers said currently there is no valuation mechanism, for global technology companies in india. In most cases, a brand licensing agreement is undertaken for which the india, army pay a fee to the parent that software.
Software companies including Google, Facebook, Microsoft, SAP and Oracle, among others, have been questioned by the tax department. and asked to explain whether they assign value on such transactions.
“The moot point of debate will remain whether, there is a mutual agreement for rendition of service. Further, the absence of consideration in various cases would lead to exclusion, from the absence of consideration in various cases would lead to exclusion from the definition.
“The problem is that this is a revenue neutral transaction, that is, software companies can claim credit of GST paid,” said a tax expert advising one of the companies.
Although this would still end up in litigation, experts said many companies may not immediately get the credit after they pay GST.
More from Facebook
The ministry of Health and Family Welfare, created a list of helpline numbers, for states/UTs for COVID19 related queries. There …
Facebook has remained silent for the entire redesign thing of their website after the event. But little by little, they …