GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF
REVENUE
CENTRAL BOARD OF DIRECT TAXES
NEW DELHI
CIRCULAR NO
8/2017, Dated: February 23, 2017
Subject: Clarification for determination of Place of
Effective Management (POEM) of a company, other than an Indian
company-reg.
The
concept of POEM for deciding the residential status of a company, other than an
Indian company, was introduced by the Finance Act, 2015. The existing provision
of clause (ii) of sub section (3) of section 6 of the income-tax, 1961 (the Act)
shall come into effect from 1st April, 2017 and accordingly, applies to
Assessment Year 2017-18 and subsequent years. Guiding Principles for determining
POEM of a company were issued by Circular No. 6 of 2017 on 24th January, 2017. Press Release on
POEM guidelines dated 24th January, 2017 has, inter alia, stated that
the POEM guidelines shall not apply to a company having turnover or gross
receipts of Rs. 50 crores or less in a financial year.
2. In
view of above, it is clarified that existing provision of clause (ii) of sub
section (3) of section 6 of the Act, shall not apply to a company having
turnover of gross receipts of Rs. 50 crores or less in a financial
year.
[F.No. 142/11/2015-TPL]
(Rajesh Kumar Kedia)
Director (Tax Policy &
Legislation)
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