Practice Areas - Acuity Law

Question 1

Income Tax

Accepted Answer

Indian Income Tax Law is governed by the Income-tax Act, 1961 (Act) and rules made thereunder. Amongst other things, the Act chieﬂy governs the situs of taxation, tax residency, charge of tax, classification of income, incentives / tax holidays / exemptions, tax rates and withholding of taxes, transfer pricing (or base erosion of proﬁts test) and other anti-avoidance provisions. India has also entered into double taxation avoidance agreements with various countries. 

Here we answer some of the common queries relating to applicability and scope of the Act.

Question 2

Compounding Under FEMA 1999

Accepted Answer

The Foreign Exchange Management Act, 1999 (“FEMA”) provides for compounding of contraventions by
the Reserve Bank of India (“RBI”) and the Directorate of Enforcement (“ED”). The Foreign Exchange
Management (Compounding Proceeding) Rules, 2024 (“Compounding Rules”) and the
Directions – Compounding of Contraventions under FEMA, 1999 (“Compounding Directions”) provide for the rules for compounding of offences under FEMA. 
In this FAQ, we cover the concept and the procedure of compounding offences under the regulations mentioned above.

Question 3

Goods and Services Tax

Accepted Answer

Goods and Services Tax (GST)was introduced in India with effect from 1 July 2017. GST is an indirect tax and has replaced a plethora of erstwhile duties, taxes, cesses and levies. The objective of GST introduction is to achieve a One Nation-One Tax regime as well as eliminate the erstwhile complex system of indirect taxation and cascading of levies. Here we discuss the fundamental structure of GST in India.

Question 4

Free Trade Agreements

Accepted Answer

Free Trade Agreement (FTA) is an arrangement between two or more countries or trading blocs that agree facilitate trade and to reduce or eliminate certain barriers to trade in goods, services, and investments. Ordinarily, whenever a product is traded across international borders, the importing and exporting countries apply certain charges, which are in the nature of tariffs or duties on the products being exchanged. Such an imposition of tariff/duty invariably increases the cost of procuring the products. FTAs seek to reduce or eliminate such tariffs and thereby make available easy access to the domestic markets of partner countries. FTAs are entered into primarily, in relation to goods and services; however, extensive agreements may even provide relaxations in investor regulations and facilitate transfer of Intellectual Property.

Question 5

Customs Bonded Warehousing

Accepted Answer

Organizations are increasingly using Customs Bonded Warehousing license to manufacture goods with the objective to reduce compliances and better cashflow management.  To understand this concept better, please read the FAQs.

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