GST Collected by Foreign Company not to be Included in Gross Receipts for Computation of Income u/s 44BB: ITAT

The Income Tax Appellate Tribunal (ITAT) has ruled that Goods and Services Tax (GST) collected by a foreign company should not be included in its gross receipts for the computation of income under Section 44BB of the Income Tax Act. Section 44BB provides for a presumptive basis of taxation for non-residents engaged in certain businesses connected with the exploration or exploitation of mineral oils. The ITAT reasoned that GST is an indirect tax collected on behalf of the government and does not form part of the foreign company's income from its business activities. Including GST in gross receipts would inflate the taxable income incorrectly. This ruling clarifies the treatment of GST for the purpose of computing income under Section 44BB for foreign companies.