Case Study On Marriott Industry

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be conducted by it outside India for Marriott Group of Hotels word wide. Advance Authority of Ruling held that the payment of annual contribution of 1.5 percent of the gross revenues of the hotel made by the Indian company was for rendering managerial and consultancy services. Thus, it was held to be Fees for Technical Services.

6. DIT Vs. Sheraton International Inc. : ITC and Sheraton entered into an agreement for development of tourism, maximizing foreign exchange earnings, etc. Sheraton’s expertise was to be utilized for publicity, marketing and advertising of hotel business. Use of Sheraton’s trade name and trade mark was incidental to main services. Sheraton was compensated as a percentage of room sales. ITO held that payment was for royalty. Tribunal held that payment was for publicity marketing and advertising of …show more content…

This particular provision is subject to controversies. The representative offices of foreign companies cannot be taxed, because according to the RBI permissions rules, they cannot carry on any business or cannot be treated as a permanent establishment. The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT), considered an interesting question in the case of sales of imported software in Sonata Information Technology Limited v Add CIT and examined the characterization of computer software income in international transactions. In the case mentioned, the assessee was an Indian company engaged in the business of distribution of computer software and had entered into distribution agreements with several overseas vendors which authorized the assessee to distribute computer software to end-users in India. The Tribunal held that the assessee had purchased software and not any IPR. Selling software is not exempted from any tax and can be only considered as a sale of goods. Hence, the supplier is not liable to pay withholding

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