“We would like to thank the Government for rescinding and modifying the circulars pertaining to taxation of R&D centres in India, which play an instrumental role in developing software solutions.
The government has considered the needs of the industry; working in due consultation on this issue. The Central Board of Direct Taxes’ has withdrawn circular No 2 (dt. March 26 2013) with immediate effect and amended circular No 3, issuing a new set of guidelines for identifying contract R&D service provider. These amendments are positive particularly for multinationals that have a strong R&D base in India. The Government has also reiterated its intent to issue safe harbor guidelines, thus promising to offer certainty and predictability to businesses. The Rangachary committee has evaluated issues pertaining to Industry taxation extensively, and we are glad that the recommendations are being considered for implementation. We look forward to the government releasing details of the safe harbor provision in the next 2 to 3 weeks.
Additionally, the government’s advance pricing agreement has picked up momentum with a large number of companies signing up. We applaud the Government for their support and commitment to our sector and we hope that this will solve the litigation issues and provide stability for multinationals to continue to invest in India.”
The government has considered the needs of the industry; working in due consultation on this issue. The Central Board of Direct Taxes’ has withdrawn circular No 2 (dt. March 26 2013) with immediate effect and amended circular No 3, issuing a new set of guidelines for identifying contract R&D service provider. These amendments are positive particularly for multinationals that have a strong R&D base in India. The Government has also reiterated its intent to issue safe harbor guidelines, thus promising to offer certainty and predictability to businesses. The Rangachary committee has evaluated issues pertaining to Industry taxation extensively, and we are glad that the recommendations are being considered for implementation. We look forward to the government releasing details of the safe harbor provision in the next 2 to 3 weeks.
Additionally, the government’s advance pricing agreement has picked up momentum with a large number of companies signing up. We applaud the Government for their support and commitment to our sector and we hope that this will solve the litigation issues and provide stability for multinationals to continue to invest in India.”