Marketing Activities in India | Key Tax Considerations

Rajeev Jain, Karan Kakkar & Priyanka Sahi – [2022] 138 taxmann.com 135 (Article)

As India moves to become a $5 trillion economy, cross-border trade is expected to play a key role in this growth journey. More and more foreign companies will look to establish either a manufacturing or a marketing presence in India, in order to market/ sell their goods and/or services in the Indian market. When a foreign enterprise creates its marketing footprints in India, it generally does so by establishing a separate legal entity or by opening a branch in India.

While creating such presence, it is important for the group to take cognizance of certain taxation aspects, which may have long-term implications in terms of tax costs as well as litigations for the multinational group in India. In this article, we have discussed various taxation aspects which need to be evaluated when planning to set-up a new marketing services entity in India.

Furthermore, with the evolution of tax framework, especially with the advent of OECD’s BEPS Project and introduction of Goods and Services Tax (GST) regime in India, this evaluation is equally relevant for companies already having such presence in India.

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