Can transfer of shares of the overseas company or a SPV to a buyer abroad be regarded as transfer of an asset located in India?

An episode in Vodafone story

In the Vodafone case that was keenly watched for the past several months, almost since August of last year, the curtain is yet to fall, says Mr Pranav Sayta, Tax Partner and Tax Leader Transaction Tax, Ernst & Young. The ‘action’, if one may term it that, is set to move on to the Supreme Court of India, he adds, during the course of a recent email interaction with Business Line.

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'Weightage should be given to the commercial realities of today'

Top transfer pricing issues the Budget should address

With global financial markets in turmoil, even as credit lines remain frozen, the major concern for the managements is the preserving of cash flow. To maintain profits or at least stay afloat companies in sectors such as real estate, aviation, information technology (including BPOs) have started downsizing their employee base, with the consequent negative impact on the economy.
"This is the appropriate time for the Government to introduce fiscal measures to withstand the global slowdown and give a boost to our economy," says Mr Vispi T. Patel, the head of direct tax practice at Economic Laws Practice (ELP), Mumbai.

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The developed nations now look at India Inc. as good and favourable investors

There's opportunity in every threat

An adverse outcome in the Vodafone case may hamper foreign investment flow into India and act as a barrier for investments into India, cautions Mr Magnus Johnsson, Global M&A Tax Head, PricewaterhouseCoopers. Companies would think twice before investing here as you don't want to pay tax (thereby reducing their effective returns) on selling the investments, he adds during a recent email interaction with Business Line.

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