Practice Area

Tax Advisory

Overview

Transactions — whether corporate acquisitions, real estate deals, or private equity investments — have tax dimensions that are inseparable from their commercial structure. The advice of a commercial tax lawyer on transaction tax issues must be factored into deal structuring from the outset, not added as an afterthought at the closing stage. At Corpus Lawyers, we provide transaction tax advisory that is integrated with commercial legal advice — covering direct tax, indirect tax, and stamp duty considerations across the full range of corporate and commercial transactions, alongside representation in tax disputes before the Income Tax Appellate Tribunal and High Courts.

Transaction Tax Structuring — M&A and Investments

Tax advisory in connection with M&A transactions, private equity investments, and joint venture structures, covering capital gains analysis (including characterisation of gains as short-term or long-term, and applicable tax treaty benefits), stamp duty optimisation, and structuring to achieve tax-efficient outcomes for both seller and acquirer.

Real Estate Transaction Tax Advisory

Tax advisory for real estate acquisitions and disposals, including analysis of capital gains tax obligations, GST on real estate transactions (including the distinction between under-construction and completed units), stamp duty planning, and tax withholding obligations under Section 194-IA of the Income Tax Act, 1961.

GST Advisory for Commercial Transactions

Advisory on GST implications of commercial transactions — including classification of supplies, applicable GST rates, input tax credit eligibility, place of supply rules for services, and GST treatment of specific transaction types including slump sale, asset purchase, and real estate development.

Tax Due Diligence

Identification of direct and indirect tax risks of a target company in M&A and investment transactions — covering pending assessments, open tax demands, GST compliance history, tax positions taken by the target that may be challenged on reassessment, and contingent tax liabilities.

Income Tax Dispute Resolution — ITAT

Representation and advisory in income tax appeals before the Income Tax Appellate Tribunal, covering corporate income tax, capital gains, transfer pricing, and withholding tax disputes arising from assessments by the Assessing Officer and Commissioner (Appeals).

High Court Tax Matters and Advance Rulings

Advisory and representation in tax matters before the High Courts, including writ petitions against arbitrary tax assessments, and preparation of advance ruling applications before the Authority for Advance Rulings under Section 245Q of the Income Tax Act, 1961 and the GST Advance Ruling Authority.

Landmark Authorities and Doctrinal Framework

Tax advisory in India operates across the direct-tax framework (Income Tax Act, 1961; Finance Acts), the indirect-tax framework (Central Goods and Services Tax Act, 2017; State GST Acts; Integrated GST Act, 2017; Compensation Cess Act, 2017), and the transfer-pricing framework (Sections 92 to 92F of the Income Tax Act read with the allied rules). Each framework has its own assessment architecture, its own appellate pathway, and its own enforcement machinery.

The General Anti-Avoidance Rules (GAAR), introduced with effect from 1 April 2017 and codified under Chapter X-A of the Income Tax Act, permit the tax authority to deny tax benefits where an arrangement is an impermissible avoidance arrangement. GAAR applies to transactions with tax benefits exceeding INR 3 crore and has substantive, not merely procedural, reach. Tax-advisory work on complex structures requires a GAAR screen at the structuring stage, not at the assessment stage.

The equalisation-levy regime introduced in 2016 and extended in 2020 captures specified digital services and e-commerce supply or services by non-residents. The OECD Pillar One and Pillar Two framework — covering reallocation of taxing rights to market jurisdictions and the 15 percent global minimum tax respectively — continues to work through the international tax landscape. India’s positioning as both a party to the framework and a major market jurisdiction requires advisory integration across the domestic and international tax frameworks.

The faceless assessment, faceless appeal, and faceless penalty frameworks introduced from 2020 reshape the tax-dispute workflow. Representation is now largely in writing, with limited personal hearing rights. Advisory and litigation workstreams have recalibrated accordingly — written submissions carry more weight, oral advocacy less. The framework has accelerated disposal for straightforward matters but created friction for factually complex matters requiring continuing dialogue.

Current Doctrinal Shifts and Live Questions

Reassessment framework post the 2021 amendment and the Ashish Agarwal ruling. The Finance Act, 2021 revised the reassessment framework under Sections 147-151. The Supreme Court ruling in Union of India v. Ashish Agarwal (2022) SCC OnLine SC 543 resolved the transitional-period treatment of pre-amendment notices. Reassessment notices issued in the transition window are now governed by a combined framework, and ongoing challenges continue to work through the appellate system.

Indirect-transfer taxation and treaty grandfathering. The 2012-vintage indirect-transfer amendment to Section 9 of the Income Tax Act, read with the 2021 clarification restricting its retrospective reach, continues to shape cross-border M&A structuring. Treaty grandfathering under the India-Mauritius and India-Singapore treaties applies to investments made before 1 April 2017; post-grandfathering investments are structured under the current framework.

GST anti-profiteering and the sunset. The anti-profiteering framework under Section 171 of the CGST Act and the NAA (later CCI from 1 December 2022) enforcement generated substantial litigation on input-tax-credit benefit pass-through. The anti-profiteering provisions sunset on 1 April 2025, with ongoing matters transitioning to the CCI. The sunset does not eliminate the sectoral focus on pricing practices post tax-rate changes.

GST on employee-related transactions and cross-border services. The GST treatment of employee secondment, cross-charges between related parties, and import of services via a related party has generated persistent dispute. Supreme Court rulings on the scope of “supply” between related parties and on the valuation of such supplies continue to develop the framework. Multinational groups with Indian operations require continuous recalibration.

Transaction Tax Structuring — M&A and Investment

Transaction tax structuring integrates income-tax, GST, stamp-duty, and FEMA considerations at the structuring stage. A merger or demerger under Companies Act Sections 232-233 has specific income-tax treatment under Sections 2(1B) and 2(19AA) — amalgamation and demerger tax neutrality is available only where the statutory conditions are met. A slump sale under Section 2(42C) carries different tax attributes from an asset-by-asset sale. An indirect transfer has its own tax attributes under Section 9(1)(i).

For cross-border investment, tax-treaty positioning under the applicable treaty (Mauritius, Singapore, Netherlands, UK, and others) determines the withholding and capital-gains exposure. The Principal Purpose Test under the Multilateral Instrument and the General Anti-Avoidance Rules overlay the treaty-level analysis. A tax-efficient structure built on treaty shopping without substantive presence is vulnerable to both PPT and GAAR challenge; a structure built on demonstrable substantive presence survives both.