Foreign cos to pay tax on all rev from seismic data contracts

Foreign firms operating in the country will have to pay tax at the existing rate of 4.223 per cent on revenue earned under seismic data acquisition and processing contracts, says a tribunal.

In a ruling, the Authority of Advanced Rulings (AAR) held that foreign firms would not enjoy any leeway even if their income falls under the label of royalties or is considered as fees for technical services.

"The entire mobilisation or demobilisation revenues received by the applicant with respect to seismic data acquisition and/or processing contracts would be taxable in India at the effective rate of 4.223 per cent," the AAR said.

Mobilisation and demobilisation revenues are the fees levied by a contractor for transporting the seismic equipment or vessel and personnel to and from a project site, as well as costs linked to establishment of site offices and other facilities. (PTI)