EPC Contracts - BMR & Associates

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TAXABILITY OF AOP (CONT) Taxable income Net basis of taxation Tax depreciation A deduction is allowed to the assesee in respect of depreciation in respect of owned (wholly or partly) assets In case, the assets used in the project are owned by one of the consortium members, claim tax depreciation by the consortium may create issues EPC CONTRACTS - FISCAL SCENARIO All rights reserved | 28
TAXABILITY OF AOP (CONT) Tax rate If the revenue / profit shares of AOP participants is determinate, each member’s share in AOP income subject to tax at the respective rate applicable to the member If the shares revenue / profit shares of AOP participants is indeterminate, the entire revenues of the AOP will be subject to tax at the highest tax rate applicable to any of the members Specific disallowance of certain expenditure Bonus, commission, interest, salary, remuneration etc paid to member is not deductible However, if AOP member also pays interest to the AOP, only net amount of interest paid to members is not allowed as deduction in computing taxable income of AOP In view of the above inefficiencies of an AOP constitution, it will be imperative that the EPC contract be appropriately structured Back EPC CONTRACTS - FISCAL SCENARIO All rights reserved | 29
Page 1 and 2: T a x a n d R e g u l a t o r y EPC
Page 3 and 4: TAXES ON CONTRACTS - A SNAPSHOT EPC
Page 5 and 6: SUPPLY OF GOODS Structure 1 Structu
Page 7 and 8: SERVICES Outside India India Offsho
Page 9 and 10: COMPOSITE CONTRACT - EPC • Where
Page 11 and 12: INCOME TAX IMPLICATIONS Classificat
Page 13 and 14: SINGLE CONTRACT - SINGLE CONSIDERAT
Page 15 and 16: EPC CONTRACTS FOR OIL FIELD SERVICE
Page 17 and 18: EPC CONTRACTS FOR POWER PROJECTS
Page 19 and 20: INFRASTRUCTURE STATUS TO PIPELINES
Page 21 and 22: C h a l l e n g e U s EPC CONTRACTS
Page 23 and 24: INSTALLATION PE - SOME EXAMPLES Ins
Page 25 and 26: TAXABILITY OF SOFTWARE Recent rulin
Page 27: TAXABILITY OF AOP Separate taxable
Page 31: INFRASTRUCTURE STATUS TO PIPELINES

EPC Contracts - BMR & Associates

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