BPOs & Tax

T HE INCOME-TAX DEPARTMENT HAS moved the Supreme Court against its earlier judgement exempting foreign BPO units from tax. Seeking quashing of the court's July 9 order on a case involving a BPO firm Morgan Stanley Advantage Services, the department submitted that the MSAS was carrying out core business activities for the parent and not just back office operations. The court had earlier upheld the authority for advance ruling order that the MSAS was not a permanent establishment as it was performing only back office operations in India and cannot be taxed under the rules.

Source:DC, 29/10/07