India plans helicopter services at major airports

The Bengaluru International Airport will be the first airport in India to have a helicopter taxi service within the next three months.

Q: When I travel to India, I find that it takes more time to reach the final destination after landing, in view of heavy traffic and congestion on Indian roads. At other international cities in the world, helicopter services are available. Why is this facility not available at Indian airports?

A: The government is seriously considering providing helicopter facilities at major airports. The Bengaluru International Airport will be the first airport in India to have a helicopter taxi service within the next three months. This has been announced by the minister in charge of civil aviation. Initially, the helicopter service will connect the airport with Electronics City. The journey would be about 15 minutes.

The fare has not yet been fixed, but is likely to be around Rs3,000 per trip. The saving in time for business travellers should make this cost attractive; it will be slightly more than the current limousine charges. This service may extended in due course at other international airports where the city has facilities for helipads in business districts.

Q: Many NRIs get misleading SMSes giving so-called tips for investing in shares on the Indian stock exchange. A few gullible investors are lured into investing in little known companies.  Are any steps being taken to protect the interest of investors?

A:The Department of Telecommunications (DOT) together with the Securities & Exchange Board of India (SEBI) are planning to take stern action against those who are sending such messages which are also received by persons residing in India. In fact, some well known brokerage houses have also complained that their names are being misused.

According to press reports, the DOT has asked SEBI to furnish the list of brokerage houses whose names have been used in the messages. SEBI has requested brokerage houses to issue an advisory, cautioning investors who are their clients. SEBI has also sought the help of the Cyber Crime Investigation Cell of the Police to help in detecting the origin of such SMSes.

Further, the surveillance team of SEBI is also taking steps to trace the origin of the text messages. Final guidelines are yet to be issued to curb unauthorised investment tips being sent through the social media.  Most of the tips pertain to penny stocks. Many companies are now being delisted based on information received from the Ministry of Corporate Affairs which has found that these companies are dormant and have not undertaken business activities in the past.

Q: A foreign company wants to set up a liaison office in India. Subsequently, it may also set up a separate project office as and when it gets a specific contract. Would such activities attract adverse tax implications in India?

A: When a liaison office is to be set up, permission of the Reserve Bank of India would have to be obtained. A liaison office would be granted approval if its main function in India is to gather information about prospective customers and other related market information. The liaison office only transmits information collected by it to its head office located in a foreign country.
The Reserve Bank while granting approval puts certain restrictions and conditions on the liaison office, which is not permitted to carry on any trading, commercial or manufacturing activity. Under Double Tax Avoidance Agreements, a foreign company would not have a permanent establishment in India merely because it has set up a liaison office.  On the other hand, if a project is to be executed and a project office is to be set up for more than the stipulated number of days prescribed in the DTAA, the profits attributable to the project office in India would be taxable.

The writer is a practising lawyer specialising in tax and exchange management laws of India. Views expressed are his own and do not reflect the newspaper's policies.