STP Process Ltd, an Indian company entered into a business agreement with Gayle LLP of UK in September 2023 for export of goods to various countries…
CA Final · Direct Tax Laws and International Taxation · MTP · November 2024
STP Process Ltd, an Indian company entered into a business agreement with Gayle LLP of UK in September 2023 for export of goods to various countries as directed by Gayle LLP. The amount of transaction between STP Process Ltd and Gayle LLP by way of sale of goods would be 180 crores spread over 3 financial years commencing from 01.10.2023. The parties (i.e., both STP Process Ltd and Gayle LLP) apprehend some ambiguity as regards the income chargeable to tax in the hands of Gayle LLP in India and STP Process Ltd. Can STP Process Ltd seek advance ruling in relation to its tax liability arising in respect of its transactions with Gayle LLP? If so, how much is the amount of fee to be paid for seeking advance ruling?
Suggested Answer and Working Notes:
Correct Answer: Option (B)
It can seek advance ruling since value of transaction undertaken or proposed to be undertaken exceeds 100 crores. The amount of fee would be - 5,00,000.
Topics: Double Taxation Relief, Non-Resident Taxation, Advance Rulings
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