India concerned over taxation on IT firms by Australia

India has flagged serious concerns with Australian authorities on the taxation issue on Indian IT companies providing off-shore software services to their Australian clients.

“Australian authorities have stated that they would look into the matter,” an official said.

The issue was raised during the recent visit of Commerce and Industry Minister Suresh Prabhu to Canberra and Sydney.

As per global trade norms, Australia can tax only on-shore activities of Indian IT firms and not off-shore services rendered from India.

Certain Indian companies have approached Australian courts also on the matter but the courts have passed orders against them.

Indian IT firms earn the highest amount by providing off-shore services to the US companies.

The Indian side have also asked for greater market access for it fruits and vegetables including potato, tomatoes, onion, okra and cucumber to increase exports.

“We have also raised the issue of investment proposals of certain Indian mining companies which are stuck there,” the official added.

During his visit, Prabhu has sought investments from Australian superannuation or pension funds in sectors including industrial corridors, ports, smart cities, airports and railway projects.

The bilateral trade between India and Australia increased to USD 18 billion in 2016-17 from USD 14.11 billion in the previous fiscal. Trade balance is highly in favour of Australia.