Supreme Court to decide Ernst & Young US LLP taxability
Business
The Supreme Court is agreed to examine if Ernst & Young US LLP has to pay tax on ₹24.06 crore it received as cost-to-cost reimbursements in connection with secondment to its Indian subsidiary.
The big question: should these payments be taxed like technical service fees under Indian law and the India-US tax treaty, or are they just regular salary costs?
Delhi High Court ruled reimbursements taxable
This all started when the Delhi High Court ruled this year that these reimbursements count as taxable technical services, overturning a previous decision that held them to be merely cost-to-cost reimbursements.
The Supreme Court's call could shape how similar cross-border work arrangements get taxed in the future, so a lot of companies will be watching closely.