Our collection of resources based on what we have learned on the ground
Resources
Q&A
What kind of wholly owned subsidiaries can foreign investors establish in India?
- May 2014
- Free Access
Under Indian Law, foreign investors are able to establish wholly owned subsidiary companies (WOS) in the form of private limited companies if they operate in sectors that permit 100 percent foreign direct investment (FDI). With India’s recent r...
Q&A
What is the process for establishing a private limited company in India?
- May 2014
- Free Access
Establishing a private limited company can be a lengthy and complicated process involving multiple steps: First, a minimum of two directors must be appointed and registered through India’s e-filing system for the establishment of a priva...
Q&A
Are corporate entities subject to tax on the distribution of dividends in India?
- May 2014
- Free Access
Yes, corporate entities are subject to a tax on the distribution of dividends. However, in the case of shareholder dividends, the associated income is exempt from tax. The current effective rate of the Dividend Distribution Tax (DDT) is 16.995 percen...
Q&A
What does Minimum Alternate Tax (MAT) entail in India?
- May 2014
- Free Access
All companies declaring low or zero profits are subject to the MAT. Presently, MAT is levied at 18.5 percent of book profits plus the applicable surcharges and education cess. The MAT is levied on companies whose tax payable under normal income tax p...
Q&A
What is wealth tax in India?
- May 2014
- Free Access
Wealth tax is calculated on March 31st of every year (referred to a s the valuation date). Wealth tax is charged to both individuals and companies at the rate of 1 percent of the amount by which the “net wealth” exceeds INR 3,000,000. Th...
Q&A
What is customs duty in India?
- May 2014
- Free Access
Customs duty is levied by the central government on the import and export of goods from India. The rate of customs duty applied to imported and exported products depends on its classification under the Customs Tariff Act. (CTA). In case of exports fr...
Q&A
What are the types of customs duties in India and what do they entail?
- May 2014
- Free Access
The types of customs duties are as followed: Basic Customs Duty (BCD) – BCD is the basic component of customs duty levied at the effective rate stipulated in the First Schedule to the Customs Tariff Act 1985 (CTA) and applied to the landed v...
Q&A
What are duties of excise in India?
- May 2014
- Free Access
Central value-added tax (CENVAT) is a tax levied by the central government on the manufacture or production of movable and marketable goods in India. The rate at which excise duty is leviable on the goods depends on the classification of the goods un...
Q&A
What is the central excise duty in India?
- May 2014
- Free Access
The central excise duty in India is a modified form of value-added tax (VAT) where a manufacturer is allowed credit on the excise duty paid on locally sourced goods as well as on the countervailing duty (CVD) paid on imported goods. The central value...
Q&A
What does value-added tax entail in India?
- May 2014
- Free Access
On April 1, 2005, VAT replaced the state level sales tax in the majority of the states in India. Under the VAT regime, the VAT paid on goods purchased within the state is eligible for VAT credit. The input VAT credit can be utilized against the VAT/...
Q&A
What does service tax entail in India?
- May 2014
- Free Access
Service tax was initially introduced in 1994 and was based on the positive list of services, wherein the specified services were made taxable. During the announcement of the 2012 budget, a new service tax regime was introduced wherein all services wi...
Q&A
Which services are on the negative list of service tax in India?
- May 2014
- Free Access
The following services are on the negative list of service tax in India: Services by Government or a local authority excluding the following services to the extent they are not covered elsewhere: a) Services by the Department of Posts by way of sp...
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