Tax case: McKinsey has KPO in India not BPO, says Supreme Court

In a setback to the global white shoe consulting firm the Supreme Court rejected a special leave petition (SLP) filed by McKinsey Knowledge Centre against a Delhi High Court order.

The High court had upheld an Income Tax Appellate Tribunal’s (ITAT) order that ruled that research and information services rendered by McKinsey India to its associated enterprise was categorized as high-end knowledge based research services (KPO). The services, ruled the ITAT were not a business process outsourcing (BPO) unit.

The High court also upheld the ITAT order on interest on delayed realisation of receivables, considering it to be a separate international transaction requiring an independent benchmarking. The Supreme Court after duly hearing both the sides, dismissed the SLP of McKinsey India, a research by Deloitte said.

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