Tax

Vodafone has become a shorthand for Indian tax troubles, but in the last year or so, it has won several important high court decisions (though not for lack of resistance from government lawyers).

A Delhi high court judgment has ruled against the Income Tax Department but in effect upped the pressure on other Mauritius or overseas-based tax avoidance structures.

Breaking: Fees earned by lawyers in courts or tribunals will not be subject to service tax under the Union Budget, which expanded the overall scope of service tax to everything except for a few exceptions.

The Union Budget’s plan to tax Vodafone’s Indian Hutch takeover and similar transactions retrospectively going back to 1962 is unconstitutional and would not pass scrutiny of the courts, said Dutt Menon Dunmorrsett Mumbai-based partner Fereshte Sethna, who represented Vodafone in its Rs 11 crore ($2.4bn) dispute with the tax office in the Mumbai High Court and the Supreme Court.

Live: The Budget 2012 speech is kicking off at 11am and Legally India will blog it live. What do you think it holds for lawyers and clients? Hike service tax for lawyers or abolish it? Increase FDI? Vodafone, round 27? DTC news? Tinker with near-unusable LLPs? Massive tax benefits for all? Damp squib? Share your thoughts and follow our live blog.

Economic Laws Practice (ELP) and Nishith Desai Associates (NDA) analysed the legal implications of the Vodafone judgment yesterday – a decision law firms across the board commended for boosting India’s image as an investment destination, upholding the rule of law and settling many questions.

The Finance Ministry has reversed its earlier budget proposal that would make service tax payable by professionals such as lawyers when bills are issued rather than when they are paid, after protests and representations from lawyers that this would be unduly onerous.

Exclusive: The Authority for Advance Rulings (income tax) has pronounced an order in favour of former Tata-Quippo shareholder DBZ Mauritius, which is contrary to the Bombay High Court’s view in the Vodafone-Essar tax case.

11:00am The Finance Minister Pranab Mukherjee’s 2011 India Union budget has just started after having been approved by cabinet. This blog will begin in earnest once the budget is over and we can get reactions from lawyers. In the meantime, IBN Live has a nice live blog page with a fast video and text updates. Please post your comments and thoughts on the budget below in the meantime.

Economic Laws Practice (ELP) has won a Rs 257 crore service tax reprieve for clients Jetlite before the Custom Excise & Service Tax Appellate Tribunal (CESTAT) which held that brand promotion without reference to services offered under business auxiliary services (BAS) category is not taxable.

Exclusive: The Delhi High Court has again stayed the imposition of service tax imposition on immovable property rentals in one of the Home Solutions cases, reaffirming its earlier stance. The order contradicted a Punjab & Haryana High Court order and put the ball back into the Supreme Court, which had asked for the Delhi High Court to adjudicate.

Yesterday's Bombay High Court decision that the tax authorities are permitted to assess Vodafone for its Indian tax liability in its acquisition of Hutchison Whampoa in 2007, means that previous and future foreign investments into India would face legal uncertainty, according to tax and corporate lawyers.

Friday's Mumbai Income Appellate Tax Tribunal (ITAT) ruling against Linklaters makes potentially all overseas professional services and law firms subject to income tax in India for the last six years or more if their staff visit India for 90 days in aggregate per year. The repercussions could be serious, according to Indian tax lawyers.

The government post-budget notifications to tax new services and amend taxation of existing ones have taken effect today, particularly impacting sectors such as aviation, construction and hospital services while retrospective service tax imposition on rentals of immovable property and commercial coaching could increase litigation.