7th Interactive Workshop
SUCCESSFUL EPC CONTRACTING IN INDIA
Addressing Fiscal and Legal Challenges
May 13-15, 2010, Hotel The Lalit, New Delhi
Workshop on "Successful EPC Contracting - Addressing Fiscal and
This would be the 7th such workshop in the series of highly acclaimed and successful
events held since 2005 across the country. The workshop would be lead by renowned
Tax and Legal experts viz
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
4. Excise duty exemption to supplies under International Competitive Bidding
and controversies surrounding such transactions including those under Cenvat
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
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
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
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