Foreign companies have setup their Captive centres either design or manufacture in India. Because it is their captive centre, they charge themselves a low charge say USD 30 per hour. or even lower. Whereas in their countries the per hour charge would be max 200 per hour. In such a case, by claiming they do a work for 30, they do not pay the right tax to India at the implied rate of 200 even though they get benefitted. Further this USD 30 also gets pumped back to their country.
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