‘SPV to pay one-third of turnover as tax’

Abhay Khairnar
Saturday, 17 June 2017

Recently, when the Pune Smart City Development Corporation Limited sought permission for doing the government audit, the Centre replied that the SPV is not a government company, hence audit would not be carried out.

Pune: All the Special Purpose Vehicles (SPVs) formed for Smart City would have to pay almost one-third of their turnover as tax to the Central government, as they are not treated as government companies.

The Pune Smart City Development Corporation Limited recently pointed this out to the Central government and requested the government that either the Company Act be amended suitably or the taxes be waived.

Additional Municipal Commissioner Prerana Deshbrathar said this practical problem has cropped up and they have raised queries with the Urban Development Ministry.

The SPV for Smart City is registered under the Company Act and shareholding of the State government and the Pune Municipal Corporation (PMC) is 50 per cent each.

As per the Act if the shareholding of the government body is 51 per cent then it is considered a government company.

Recently, when the Pune Smart City Development Corporation Limited sought permission for doing the government audit, the Centre replied that the SPV is not a government company, hence audit would not be carried out.

Naturally, all rules applicable to private companies would be applicable to it and it would have to pay Goods and Service Tax (GST) and Income Tax to the government.

Related News