Recent tax amendment controversy creates an excellent opportunity to provide an overview of the relevant taxes for foreign-invested entities in India, including the most important points for 2013 – goods and service tax (GST) reform, proposed tax revisions under the 2013-14 Budget, the entry into force of several double taxation agreements (DTAAs), and new General Anti-avoidance Rules (GAAR).
In this issue of India Briefing, we begin with an overview of India’s taxes on business, which includes a section on India’s double taxation avoidance agreements, and then discuss individual income tax rates and deductions. Finally, we discuss India’s tax reforms in 2013, including an article by Chandrahas Choudhury, New Delhi correspondent for Bloomberg View, “Can India Tax Itself to Prosperity?”
•An Overview of India’s Business Taxes
•Individual Income Tax Rates and Deductions
•India’s Tax Reforms in 2013
To coincide with the commencement of India’s annual audit season, this issue of India Briefing Magazine provides an overview of Indian audit procedures for the non-audit foreign executive based in India, as well as for the CFO at the head office who may not be familiar with India’s specific audit regulations and accounting standards. We aim to highlight some of the key areas for both levels of international executives responsible for their Indian businesses.
Also in this issue, we examine how India’s accounting standards differ from the globally accepted IFRS and IAS protocols, and why it is important to be aware of such discrepancies. We also outline the standard steps and procedures an Indian auditor will go through during the audit process and explain pre-audit preparations that can be carried out to make the process easier to follow and understand for foreign executives. Such preparations will also help the auditor conduct the necessary audit work in a straightforward and efficient manner with clear results that can be used as part of an internal health check for the company。
Indian global trade has tripled from US$252 billion in 2006 to US$794 billion in 2012. This has been further influenced by the increasing global awareness of India’s middle class population – some 250 million people, a similar size to that of China’s. Growth in India has also been consistently strong as the trade figures suggest.
The United States bilateral trade with India has risen consistently in each of the past five years, as has that with the European Union – in fact the EU is India’s largest trade partner. Furthermore, an ongoing series of economic and investment reforms in India are changing the business environment in positive directions as never before. Indian consumers want to buy things – domestic sales of high end products, such as Apple’s iPhones and iPads, have risen by over 400 percent in the past year. Coupled with this phenomenon is the emergence of India as a global manufacturing hub – Indian wages are a third of those in China, and the country is inheriting the age demographic dividend that has powered China since the early 1990s. Today, the average age of an Indian worker is 23 – and with a population of over a billion, India has a huge and inexpensive workforce. The country offers not just a large domestic consumer market, but also a rich vein of product availability for global sourcing businesses. For example, auto titan Ford has announced plans for a facility in Gujarat that will manufacture three different vehicle types with 50 percent marked for domestic sales and 50 percent for export.
These dynamics drive India as a global trading hub, and they are the reason why we concentrate on this subject in this issue of India Briefing. Within you will find tips for buying and selling in India from overseas, as well as how to set up a trading company in India. India is poised to become a major global sourcing center, and we hope this issue both educates and informs as how best to approach this growing market.
In this issue:
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