The Ministry of Finance has issued a press release
stating that the Safe Harbour Rules have been finalized
after considering the comments of various stake holders.
The significant aspect is that in case of transactions in
the nature of routine ITES and ITS activities the earlier
ceiling of Rs 100 crore has been removed. Transactions upto
Rs. 500 crore have been provided safe harbour margin of 20%
and transaction above Rs.500 crore have been provided safe
harbour margin of 22%.
Similarly, the ceiling of Rs. 100
crore provided for transactions in the nature of corporate
guarantee has been removed. Also, the rules provide for a
time bound procedure for determination of the eligibility of
the assessee and the international transactions. Any
rejection of the option exercised by the assessee shall be
by way of a reasoned order passed after hearing the
assessee. The assessee shall have a right to file an
objection with the Commissioner against adverse finding
regarding the eligibility. The Commissioner shall
thereafter decide about the validity of the option
exercised by the assessee.
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