Definitions for safe harbour rules for income attribution in case of income from business and profession

Definitions for safe harbour rules for income attribution in case of income from business and profession.

99. For the purposes of this rule and rules 100 to 102, —

(a) "contract manufacturer" means an Indian company who produces specified electronic goods on behalf of any foreign company in a custom bonded area;

(b) "custom bonded area" means a warehouse as referred to in section 65 of the Customs Act, 1962;

(c) "eligible assessee" means—

(i) a foreign company engaged in the business of diamond mining which has exercised an option for application of safe harbour rules in accordance with rule 100; or

(ii) a foreign company which stores components in a warehouse in a custom bonded area for providing them to a contract manufacturer to be used for manufacturing of specified electronic goods;

(d) "eligible business" means—

(i) a business of selling raw diamonds in any notified special zone as referred under section 9(9)(c)(ii)(C); or

(ii) the business activity of storage of components in a warehouse in a custom bonded area for sale to a contract manufacturer to be used for manufacturing of specified electronic goods;

(e) "gross receipts" means, —

(i) in a case referred to clause (d)(i), the aggregate of —

(A) the amount paid or payable to the eligible assessee or to any person on his behalf on account of sale of raw diamonds by such eligible assessee; and

(B) the amount received or deemed to be received by the eligible assessee or by any person on his behalf on account of sale of raw diamonds by such eligible assessee;

(ii) in a case referred to clause (d)(ii), the aggregate of —

(A) the amount paid or payable to the eligible assessee or to any person on his behalf on account of sale of components in a warehouse in a custom bonded area to the contract manufacturer to be used for manufacturing of specified electronic goods; and

(B) the amount received or deemed to be received by the eligible assessee or by any person on his behalf on account of sale of components in a warehouse in a custom bonded area to the contract manufacturer to be used for manufacturing of specified electronic goods;

(f) "raw diamonds" means diamonds that are —

(i) uncut or unpolished;

(ii) unassorted;

(iii) unworked or simply sawn, cleaved or bruted;

(iv) not conflict diamonds as defined by the Kimberley Process;

(v) accompanied by Kimberley Process Certificate issued by the Kimberley Process authority in the exporting country; and

(vi) falling under Tariff Heading 7102 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975);

(g) "relevant tax year" means the tax year in which the option for safe harbour is exercised;

(h) "specified electronic goods" shall mean—

(i) mobile phones; or

(ii) laptops, all-in-one personal computers and tablets; or

(iii) servers and ultra small form factor (USSF); or

(iv) sub-assemblies to the finished goods mentioned in clauses (i) to (iii); or

(v) hearables and wearables and accessories related to the finished goods mentioned in clauses (i) to (iii).