7th Interactive Workshop on Successful EPC Contracting - Addressing Fiscal and Legal Challenges
Venue: Hotel The Lalit, New Delhi
|Event Date/Time: May 13, 2010||End Date/Time: May 15, 2010|
Mr Sujit Ghosh, Partner BMR Advisors & Head of Infrastructure Practice (core competence Indirect taxes),
Mr Gokul Chaudhri, Partner BMR Advisors and Head of Energy Practice (core competence Corporate Taxes) and
Mr Akshay Jaitly, Founding Partner at Trilegal (core competence legal documentation of EPC contacts).
Unlike other years, the present workshop would aim to deliberate entirely on controversial Fiscal and Legal issues that are being increasingly witnessed by the Industry. While we are in the midst of finalizing the course content, an indicative list of some of the issues, that the Faculty would seek to address are as follows:
1. Analysis and impact of the recent judgments denying benefit to In-transit Sales (i.e. E1 E2 sales) on grounds of the sale being "Pre-determined" (refer decision in the case of A&G projects) & possible solutions to overcome the same.
2. Deliberations on the recent L&T decision (that ruled against plurality of works contract tax in a subcontractor- main contractor - project owner supply chain), its impact and implementation across the country.
3. Controversy surrounding treatment of Civil Material for Customs duty purposes under Project Imports and other beneficial exemption notifications for Power Projects etc.
4. Excise duty exemption to supplies under International Competitive Bidding and controversies surrounding such transactions including those under Cenvat Credit Rules.
5.Controversies surrounding availability of Cenvat Credit on construction material used in construction of immovable property, where the immovable property is further used in rendering taxable output services.
6. Controversy surrounding availability of Cenvat Credit, to the Project Owner, on goods consigned to site (by the Original Equipment Manufacturer on behalf of the Contractor), where the Contractor avails benefit of Notification Number 12/2003 ( which permits deduction of value of material without facility of Cenvat Credit).
7. Controversy surrounding attempt by Revenue to add the value of Free of Cost material (supplied by Project Owner), in computing the service tax base for Contractors availing 67 % abatement under Commercial and Industrial Construction Services & E&C Services (pre Finance Bill 2010 era & Post Finance Bill 2010 era).
8. Interpretation and Implications of the recent amendment to the Works Contract Service Composition Scheme that proposes to levy tax on Free of Cost material, whether supplied under any other contract for a consideration or otherwise.
9. Classification of the turnkey contracts for service tax purposes, in keeping with the arbitrage in the rate of tax, availability of Cenvat Credit on inputs and Composition Scheme.
10. Implications of the amendment to the definition of "inputs" in the Cenvat Credit laws (which now excludes cement, angles, channels, CTD, TMT used for construction of factory shed, building or laying of foundation or making of structures for support of capital goods) in so far as Service providers (i.e. Turnkey contractors) are concerned.
11. Controversies under VAT surrounding Interstate and Imported supplies made under turnkey contracts.
12. Demystifying Deemed Export Benefits for Non Mega, Mega and Ultra Mega Power Projects.
13. Controversy arising owing to withdrawal of instruction 1829 by the CBDT and whether it would hence forth enhance the risk of creation and taxation as Association of Person in consortium contracting.
14. Addressing the challenges of withholding tax under turnkey contracts, post the judicial decision in respect of Ansaldo.
15. Controversy surrounding attribution of offshore supplies to permanent establishment created for installation and commissioning in India.
16. Impact of transfer pricing provisions for international transactions between group companies involved in executing EPC contracts on an integrated basis.
17. Continuing controversy with regard to taxability of designs and drawing owing to distinguishing judicial decisions.
18. New Government of India ("GoI") guidelines for bidding for infrastructure projects on the PPP model, including CAG audit, consortium formation and conflicts of interest and procedure.
19. Liquidated damages - when do they become penalties, LDs for milestone payments, structuring LDs as discounts, claiming LDs under split EPC contracts.
20. Indemnities and limitation of liability and commonly accepted exceptions to capped liabilities.
21. Bank guarantees - how to draft appropriate and enforceable guarantees, status of guarantees on amendment of underlying contracts etc.
22. Recent trends in arbitration - an analysis of some recent case law, including jurisdiction of courts and grounds for challenge of an arbitral award.
23. Goods & Service Tax 2010 - the challenges ahead and what it means to the Infrastructure and Energy Industry.
24. Overview of the New Income Tax Code and what it means to the Infrastructure and Energy Industry.
In addition, the high-point of the event would be a simulation of real-life EPC contract bid planning and presentation (from fiscal and legal perspective only), involving interactive role played by (bidding teams comprising the participants) for the entire duration of Day 3 of the program . The objective of the interactive case studies would be to enable application of the understanding and knowledge gained at the workshop in preparation and delivery of an effective bid/implementation of a project, in a simulated environment. The group dynamics involved in the bid preparation and the subsequent presentation of the bid by the selected bidding team would help participants gain a practical insight on construction and evaluation of a successful EPC bid.
The workshop introduces the delegates to various type of EPC Contracts, the FIDIC Model Perspectives of the Project Owners versus Contractors Overview of the fiscal framework, Explanation of a typical lump-sum turnkey contract Corporate tax - implications and challenges, Indirect tax implications and risks, structuring of EPC contracts, etc. along with insights into the latest issues related to taxation and is an interactive programme with substantial time given for questions and answers. Also, the high-point of the event is the simulation of a real-life EPC contracting bid planning and presentation, involving interactive role play by (bidding teams comprising) the participants. The objective of the interactive case study is to enable application of the understanding and knowledge gained at the workshop to preparation and the delivery of an effective bid in a simulated environment. The group dynamics involved in the bid preparation and the subsequent presentation of the bid by the selected bidding team would help participants gain a practical insight on construction and evaluation of a successful EPC bid.