Overview

• Released as a working-paper proposal, the scheme lets foreign companies elect to be taxed on an industry-specific deemed share of India-sourced gross revenue, with the option to revert to regular filing.
• Opting entities would receive a safe harbour under which tax authorities would not separately litigate the existence of a permanent establishment for the covered activity.
• Participants would be relieved from maintaining detailed local books for opted activities, cutting compliance and audit burdens.
• Illustrative benchmarks include a 5–30% range across sectors and, for technology and equipment, 5% of gross receipts for offshore supply and 20% for onshore services.
• NITI Aayog urges the Finance Ministry to set up a working group and consult stakeholders, while also recommending codified PE and attribution rules aligned with global norms, expanded APA/MAP capacity and no retrospective changes.