Information technology (IT) and IT enabled services (ITeS)

Information technology (IT) and IT enabled services (ITeS)

Our service offerings for the IT and ITES industry

India is regarded as the back office of the world owing mainly to its IT and ITES industry. The sector in India grew at a Compound Annual Growth rate (CAGR) of 15 per cent over 2010-15, which is 3-4 times higher than the global IT-ITES spend, and is estimated to expand at a CAGR of 9.5 per cent to US$ 300 bn by 2020.  India is also the world's largest sourcing destination for the information technology (IT) industry, accounting for approximately 67 per cent of the US$ 124-130 bn market.

Opportunities and Challenges:

The changing economic and business conditions, rapid technological innovation, proliferation of the internet and globalization are creating an increasingly competitive environment. The role of technology has evolved from supporting corporations to transforming them. Global companies are increasingly turning to offshore technology service providers in order to meet their need for high quality and cost competitive technology solutions.

We understand that being in the IT and ITES industry, your company can encounter a wide variety of risks and challenges in their endeavor to create and maintain a seamless, successful, sustainable and scalable business. Some of the challenges faced include:

  • Ability to create and maintain a truly world class proven global delivery model which would allow your organization to provide services to customers on a best shore basis. This would require round the clock execution capabilities across multiple time zones, access to a large pool of highly skilled technology professionals and a knowledge management system to reuse solutions where appropriate
  • Develop and expand a strong, comprehensive, best in class end to end solutions and service offerings in order help your clients gain market differentiation or competitive advantage and thus capture a greater share of your client’s technology budgets
  • Ability to scale when the opportunity arises. This would require constant investment in infrastructure and rapidly recruit, train and deploy new professionals
  • Manage revenue and expenses during economic downturn, enhance your organization’s capacity to withstand pricing pressures, commoditization of services and decreased utilization rates
  • Manage exchange rate volatility and counter party risk in treasury operations
  • Expand your client list across business verticals to reduce over dependency and risk of losing substantial market share
  • Maintain superior and sophisticated project management methodology in line with global quality standards and ensure timely, consistent and accurate execution to achieve highest client satisfaction
  • Ensuring successful integration of inorganic growth opportunities that your organization may undertake from time to time across geographies

How we can help

Some of the key services being offered to this industry include:

  • Internal and management audits
  • Enterprise risk management (ERM)
  • Information system audits
  • Corporate advisory
  • Financial due diligence and structuring services
  • Tax and regulatory services

Advantage RSM:

  • RSM in India is consistently ranked amongst India’s top six accounting and consulting groups and globally RSM is the seventh largest audit, tax and consulting network
  • To meet our clients’ challenges, our IT and ITES practice teams have honed the means and resources to assist both established and emerging enterprises alike to succeed in dynamic markets
  • RSM in India caters to some of the leading IT and ITES companies having global presence across the US, UK and South East Asia
  • Our professionals have the necessary vision, experience, industry insights and innovative approaches to provide clear and practical advice to companies in this sector to help them navigate in markets that are rapidly consolidating
  • Extensive experience in advisory, taxation and accounting matters across various functions, sectors and geographies
  • Multi-disciplinary team of professionals comprising of Chartered Accountants, MBAs, Engineers, Company Secretaries, CISA / DISA, Cost Accountants and Law graduates

Supreme Court rules that gifting of freebies by Pharmaceutical Companies to medical practitioners is not allowable expenditure under the Income Tax Act, 1961

1 July 2022
Distribution of incentives (i.e. freebies) by pharmaceutical and allied health sectors industries to doctors, medical practitioners etc. and its allowability of claim as business expenditure in the light of Explanation 1 to section 37(1) of the Income-tax Act, 1961 (‘the Act’) has been one of most litigated issue.

Supreme Court rules that gifting of freebies by Pharmaceutical Companies to medical practitioners is not allowable expenditure under the Income Tax Act, 1961

1 July 2022
Distribution of incentives (i.e. freebies) by pharmaceutical and allied health sectors industries to doctors, medical practitioners etc. and its allowability of claim as business expenditure in the light of Explanation 1 to section 37(1) of the Income-tax Act, 1961 (‘the Act’) has been one of most litigated issue.

CBDT Extends Safe Harbour Rules to Assessment Year 2022-23

1 July 2022
On 17 June 2022, Central Board of Direct Taxes (‘CBDT’) issued Notification No. 66 /2022/F. No. 370142/26/2022-TPL. Vide this Notification, the CBDT has extended the Safe Harbour Rules (‘SHR’) to Assessment Year (‘AY’) 2022-23 relevant to the previous year 2021-22.   

Guidelines for removal of difficulties under section 194R of the Income Tax Act, 1961

1 July 2022
Finance Act 2022 inserted a new section 194R of the Income Tax Act, 1961 (‘the Act’), which mandates a person, who is responsible for providing any benefit or perquisite (whether convertible into money or not) to an Indian resident, to deduct tax at source at the rate of 10% of the value of such benefit or perquisite.

Extension of Due-date for filing of return in Form GSTR 3B for the month of April 2022 till 24 May 2022

1 July 2022
In view of persistent technical glitches faced by GSTN leading to non-updation of GSTR 2B report with supplier filings pertaining to April 2022 for several taxpayers, Central Board of Indirect Taxes and Customs (CBIC) vide Central Tax Notification No. 05/2022 dated 17 May 2022 has extended the due-date for filing of return in Form GSTR 3B till 24 May 2022

MCA issues Companies (Indian Accounting Standards) Amendment Rules,2022 to be effective from 1 April 2022

1 July 2022
The Ministry of Corporate Affairs (“MCA”) notified Companies (Indian Accounting Standards) Amendment Rules, 2022 (“Rules”) vide Notification dated 23 March 2022. These Rules shall come into effect from 1 April 2022.

Jaipur Tribunal Rules that Mere reflection of higher income in Form 26AS not a reason to make additions to the returned income offered by the assesse

1 July 2022
Recently, the Hon’ble Income-tax Appellate Tribunal (‘ITAT’) bench - Jaipur in the case of M/s Shri Jeen Mata Buildcon Pvt. Ltd vs. the ITO has passed a verdict on 8 March 2022 in favour of the assessee and deleted the addition made based on mere reflection of higher income in Form 26AS of the assessee.  

Jaipur Tribunal Rules that Mere reflection of higher income in Form 26AS not a reason to make additions to the returned income offered by the assesse

1 July 2022
Recently, the Hon’ble Income-tax Appellate Tribunal (‘ITAT’) bench - Jaipur in the case of M/s Shri Jeen Mata Buildcon Pvt. Ltd vs. the ITO has passed a verdict on 8 March 2022 in favour of the assessee and deleted the addition made based on mere reflection of higher income in Form 26AS of the assessee.  

Ruling pronounced by National Company Law Tribunal in case of Panasonic Group –GAAR not to interfere with the rights of the taxpayers to arrange its affairs tax efficiently

1 July 2022
Recently, Chandigarh Bench of National Company Law Tribunal (‘NCLT’) approved the scheme of arrangement (‘Scheme’) between Panasonic Group Companies under section 230-232 of the Companies Act, 2013 which provided for the amalgamation of the entities based on commercial rationale and factors like reduction in operating and marketing cost, economies in procurement, i

Brief Note on Section 194R: TDS on benefit of perquisite in respect of business or profession

1 July 2022
The Finance Act 2022 has introduced section 194R of the Income Tax Act, 1961 (‘the Act’), which provides for deduction of tax (‘TDS') by any person who is providing benefit or perquisite (whether convertible into money or not) to an Indian resident arising from carrying out a business or profession carried out by such resident person.

Supreme Court validates the reassessment notices issued under unamended section 148 of the Income Tax Act between 01 April 2021 to 30 June 2021

1 July 2022
Finance Act 2021 revamped the entire reassessment proceedings with effect from 01 April 2021, wherein the pre-existing regime was substituted with the corresponding new regime along with introduction of new section 148A of the Income Tax Act, 1961 (‘the Act’) and changes in time limitation for issuance of notices.  

Mohit Minerals Private Limited Supreme Court Ruling - No levy of IGST on ocean freight in case of import of goods on CIF basis

1 July 2022
In view of careful interpretation and analysis of the fundamentals of Constitution, the Supreme Court verdict in the case of M/s. Mohit Minerals Pvt Ltd has clearly etched its spot as one of the most significant rulings of the recent times.

Key Amendments passed in the Finance Act 2022 vis-s-vis Original Finance Bill 2022

1 July 2022
The Finance Bill 2022 was introduced in the Lok Sabha on 1st February 2022. On 24th March 2022, the Finance Minister, Nirmala Sitharaman, proposed about 39 changes to be made in the Bill and the same was passed by the Lok Sabha on March 25, 2022 incorporating such proposed amendments.

Suo motu Disallowance u/s 40(a)(i) or 40(a)(ia) does not exonerate the assesse from the liability u/s 201 of the IT Act

30 June 2022
As per the provisions of section 40(a)(i)(a) of the Income Tax Act, 1961 (‘IT Act’), if an assessee who pays a sum of money by way of interest, royalty, fees for technical services or any other sum to a person outside India or within India, fails to deduct and/or deposit TDS as per the provisions of Chapter XVII-B with the government, the amount so paid will be dis

Pages