India Tax Weekly - March 31, 2012

Centric India offshore Private Ltd – Authority for Advance Rulings (AAR), New Delhi

Applicant, an Indian tax resident, is a wholly owned subsidiary (WOS) of a UK company namely Centrica Plc, UK. The said UK company along with two other subsidiaries located in UK and Canada (Overseas Entities) are engaged in the business of supplying gas and electricity to various consumers across UK. The Overseas Entities outsourced their back office support functions to third party vendors located in India.

Applicant was set up in 2008 for coordinating services provided by such third party vendors. The applicant also entered into a secondment agreement with the Overseas Entities to provide staff with requisite knowledge of various process and practices to perform managerial activities for the applicant in India. Under the secondment arrangement, seconded employees continue to retain lien on their employment with Overseas Entities. Overseas Entities were also responsible to provide