TagTaxation

SEBI’s New Price Discovery Framework: Navigating the Tax Implications

[Parv Jain is a 3rd-year B.A., LL.B. (Hons.) student at the Institute of Law, Nirma University, Ahmedabad] Recently, the Securities and Exchange Board of India (‘SEBI’) led the way and proposed a unique price discovery method for listed Investment Companies (‘ICs’) and listed Investment Holding Companies (‘IHCs’) through its consultation paper on “Framework for Price Discovery of Shares of listed...

SEBI’s Proposal for Indian Mutual Funds and Overseas Investments

[Adnan Danish and Zaier Ahmad are penultimate year BA LL.B. (Hons.) students at National Law Institute University, Bhopal ] The Securities and Exchange Board of India (SEBI) has recently issued a consultation paper that aims to address a regulatory gap. Currently, SEBI-registered mutual funds can invest in various overseas securities, including American Depository Receipts (ADRs), Global...

The Case for Farmland REITs: Redefining Real Estate Investments

[A.S Vamsi Krishna and Swagat Ahuja are 4th year B.A.LL.B. (Hons.) students at Rajiv Gandhi National University of Law, Punjab] Real estate investment trusts (‘REITs’) are publicly owned entities that enable a broad spectrum of investors to acquire fractional ownership in real estate assets. In recent years, farmland investments via REITs has gained traction due to their ability to provide stable...

Venture Capital’s Tryst with Tax: Revisiting the Debate on Carry

[Bhaskar Vishwajeet and Abhinav Shankarraman are final year law students at Jindal Global Law School] The Karnataka High Court recently overruled a Customs, Excise, Service Tax Appellate Tribunal (“CESTAT”) order (page 4) on the service tax status of venture capital trusts (“VCTs”), declaring that service tax is not applicable to VCTs as they are pass-through structures. The authors argue that...

Judicial Odyssey of MFN Clauses: Analysing AO v. Nestle SA

[Akarshi Narain and Harshitha Adari are third-year law students at NALSAR University of Law, Hyderabad] In October 2023, the Supreme Court of India resolved a prolonged dispute in AO v. Nestle SA over the interpretation of the Most Favored Nation (MFN) clauses in Double Taxation Avoidance Agreements (DTAAs). A Delhi High Court case has further echoed its commitment to the verdict and dismissed...

Buyback Consideration Pre-115QA: Deemed Dividend or Capital Gains?

[Shaswat Kashyap and Harshal Chhabra are students at Gujarat National Law University] The buyback of shares involves a company repurchasing its shares and other specified securities issued by the company. This approach has consistently been a favoured means for Indian companies to distribute accumulated profits among their shareholders. Buybacks are also considered to be more tax-efficient when...

Clarity or Complexity?: Decoding the Supreme Court’s Verdict on Interpreting MFN Clause in DTAAs

[Manas Rohilla and Smruti Kulkarni are 3rd year B.A., LL.B. (Hons.) students at the Gujarat National Law University, Gandhinagar] On October 19, 2023, the Supreme Court of India, in the case of Assessing Officer Circle (International Taxation) 2(2)(2) New Delhi v. Nestle SA delivered a controversial decision regarding the interpretation and application of the Most Favoured Nation (MFN) clauses in...

The Complex Jurisprudence of Dividend Distribution Tax as Inverse Split Rate

[Rupam Dubey is a third year B.A.LLB student at the National Law School of India University Bangalore] The landscape of dividend taxation in India has experienced significant changes over the past two decades, leading to a perplexing situation for courts and income tax tribunals. This uncertainty surrounding the nature of the dividend distribution tax (DDT) has resulted in contradictory judgments...

Deciphering Tax Evasion: A Legal Perspective on Leveraging AI/ML for Robust Enforcement

[Syed Alwaz Asif is a penultimate year law student at Dr Ram Manohar Lohiya National Law University, Lucknow.] In an era where organizations and governments are inundated with vast amounts of data, the challenge of effectively detecting and preventing tax fraud has intensified. The overwhelming magnitude of information available often surpasses human capacity to discern intricate patterns and...

GST’s New Frontier: Taxability of Corporate Guarantees

[Esha Rathi is a final year B.B.A. LL.B. (Hons.) student at Jindal Global Law School] Parent companies extending corporate guarantees for their subsidiaries is a common practice but has been a subject of debate on whether it can be construed as a taxable service.  In July 2023, the Directorate General of Goods and Services Tax Intelligence issued tax demand notices to numerous local corporate...

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