SC Clarifies Reverse Charge, Bogus Purchases, and Mauritius DTAA in Key Tax Rulings
Opinion
C
CNBC TV18•30-01-2026, 08:02
SC Clarifies Reverse Charge, Bogus Purchases, and Mauritius DTAA in Key Tax Rulings
- •The Supreme Court ruled that HT Media Ltd is not liable for service tax on payments to foreign agents for booking speakers, as merely scouting and arranging speakers abroad does not constitute taxable event management services in India.
- •The SC clarified that the reverse charge mechanism applies only to taxable services, and since the foreign agents' service was not taxable in India, no liability arose for HT Media.
- •ITAT Mumbai quashed a ₹2.70-crore reassessment against Kalpataru Projects International Ltd, stating that employee statements alone, without incriminating evidence from a search, cannot deem purchases bogus.
- •The Tribunal emphasized that disallowance of genuine business expenditure requires tangible evidence, not just belated oral statements or allegations from disgruntled employees.
- •The Supreme Court effectively closed the Mauritius tax avoidance route, ruling that the grandfathering clause for the Indo-Mauritius DTAA applies only if an entity has substantial presence and activity in Mauritius to qualify as a resident at the time of investment, impacting cases like Tiger Investments' Flipkart sale.
Why It Matters: Recent Supreme Court and ITAT rulings clarify tax liabilities, reassessment criteria, and close tax avoidance routes.
✦
More like this
Loading more articles...
