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Minimised tax costs of a relocation project for a healthcare company

Engagement: A leading healthcare company wanted to relocate its office premises. As a part of the relocation project, they had to set up new workstations for employees, storage racks, etc. in their new office. The project was subjected to various taxes, some of which (such as service tax and VAT) came under the umbrella of indirect taxes.

Thus, the challenges involved were:

  • Saving tax costs on import of office equipment
  • Opting for the most tax-efficient business model from the various models available
  • Ensuring that documentary evidence was maintained according to the selected model

 

Solution
After analysing the client’s requirements, SKP assisted the company as follows:

  • Conducted brainstorming sessions with the client and vendors to understand the nature and flow of transactions
  • Provided a comparative analysis of the various business models by way of a detailed cost sheet
  • Rigorously analysed the provisions laid down under the laws governing service tax and VAT
  • Evaluated various tax benefits available to minimise tax cost
  • Analysed the pros and cons of each business model to ascertain the most tax-efficient model
  • Pointed out the major hindrances and designed an operating model that helped them get the maximum tax benefits possible
  • Evaluated various options for sourcing material, etc. in order to mitigate other costs such as transportation cost, etc.
  • Negotiated with vendors for adopting the most tax-efficient model chosen by the company

 

Value Delivered
Based on SKP’s analysis, the client was able to enjoy savings in tax costs and was able to keep the cost of the entire relocation project within the budgeted limit.