Accounting & Bookkeeping for Australian Companies in India
Australia's economic relationship with India has strengthened significantly in recent years, with bilateral trade valued at approximately AUD 37 billion in 2025. Major Australian companies including BHP, Rio Tinto, Macquarie, Telstra, Cochlear, and Atlassian have established operations in India across mining services, financial services, technology, telecommunications, and education. The signing of the India-Australia Economic Cooperation and Trade Agreement (ECTA) in April 2022 and the ongoing negotiations for a comprehensive CECA have further accelerated Australian investment into India.
Every Australian company operating in India — through a Wholly Owned Subsidiary (WOS), Branch Office, Liaison Office, or Joint Venture — must maintain proper books of account under India's Companies Act, 2013. This includes keeping books at the registered office, appointing a statutory auditor (a practicing Chartered Accountant), and filing annual financial statements with the Registrar of Companies (RoC).
Australian companies benefit from a relatively close alignment between Australian Accounting Standards (AASB — largely derived from IFRS) and Indian Accounting Standards (Ind AS, also converged with IFRS). However, there are important differences in India-specific carve-outs and local compliance requirements that make Indian accounting distinct from what Australian CFOs are accustomed to. Understanding these differences is critical for accurate consolidated financial reporting.
BeaconFiling provides comprehensive accounting and bookkeeping services specifically designed for Australian companies operating in India, ensuring full statutory compliance and seamless consolidation with Australian reporting frameworks.
How Australia's DTAA Affects Accounting & Bookkeeping
The India-Australia Double Taxation Avoidance Agreement (DTAA), signed in 1991, governs the taxation of cross-border income between the two countries. Unlike many of India's DTAAs with European nations, the India-Australia treaty has relatively higher withholding rates, which makes tax-efficient structuring of intercompany transactions particularly important for Australian companies.
Under the India-Australia DTAA, withholding tax on fees for technical services — which can include accounting and bookkeeping charges between group companies — is capped at 15%. While this is lower than India's domestic rate of 20%, it is higher than the 10% rate available under many other DTAAs.
Key DTAA provisions relevant to accounting:
- Fees for Technical Services (Article 12): 15% withholding — higher than the 10% available under Japan, Netherlands, or France DTAAs, making it important to structure intercompany charges efficiently
- Dividends (Article 10): 15% withholding on dividends remitted from the Indian subsidiary to the Australian parent
- Interest (Article 11): 15% withholding on interest from intercompany loans
- Royalties (Article 12): 10-15% depending on the type (10% for equipment royalties, 15% for others), including ERP and accounting software licenses
- Permanent Establishment (PE): Australian accounting or finance staff working from India for extended periods could create a PE for the Australian entity
The India-Australia ECTA (Economic Cooperation and Trade Agreement), in force since December 2022, has expanded market access and reduced tariffs on many goods. The ongoing CECA negotiations aim to further liberalize trade in services, including professional services like accounting. For more details, see our guide on the India-Australia DTAA.
Document Requirements from Australia
Australia is a member of the Hague Apostille Convention, which means Australian documents can be authenticated via Apostille issued by the Department of Foreign Affairs and Trade (DFAT) or authorized state courts. This is simpler and faster than embassy attestation. For a comparison, see Apostille vs. Embassy Attestation.
Documents required for setting up accounting services for an Australian subsidiary in India:
From the Australian Parent Company
- ASIC (Australian Securities and Investments Commission) extract or Certificate of Registration — apostilled
- Board Resolution authorizing the engagement of Indian accounting services — notarized and apostilled
- Latest audited financial statements of the Australian parent (for transfer pricing benchmarking)
- Intercompany service agreement detailing the scope and pricing of accounting services
- Power of Attorney authorizing an Indian representative — notarized and apostilled
- Tax Residency Certificate from the Australian Taxation Office (ATO) for DTAA benefit claims
From the Indian Subsidiary
- Certificate of Incorporation from the RoC
- PAN and TAN cards of the company
- GST registration certificate
- Board Resolution appointing the statutory auditor
- Bank statements and opening balance sheet
- Previous year's financial statements and tax returns (if applicable)
Step-by-Step Accounting & Bookkeeping Process
The structured process for setting up and maintaining accounting for an Australian company's Indian subsidiary:
Step 1: Chart of Accounts Design
Create a chart of accounts that satisfies Ind AS requirements for Indian statutory reporting and aligns with the Australian parent's AASB/IFRS reporting structure. Australian companies commonly use Xero, MYOB, or SAP in Australia. For the Indian subsidiary, Tally ERP, Zoho Books, or SAP Business One are the standard platforms. The chart of accounts should be designed to minimize manual consolidation adjustments at month-end.
Step 2: Daily Transaction Recording
Record all financial transactions — sales, purchases, expenses, payroll, intercompany transactions, and bank reconciliations. Indian law requires every transaction to be backed by a valid tax invoice or voucher. GST compliance demands accurate HSN/SAC code classification on every invoice for proper input tax credit claims.
Step 3: Monthly GST Compliance
File monthly GST returns: GSTR-1 (outward supplies, due by the 11th) and GSTR-3B (summary return with tax payment, due by the 20th). Australia's GST system (10% flat rate with BAS quarterly filing) is considerably simpler than India's multi-rate GST (5%, 12%, 18%, 28%) with monthly filing requirements, e-invoicing mandates, and input tax credit reconciliation. Australian companies often find India's GST compliance to be one of the most operationally demanding aspects of running an Indian subsidiary.
Step 4: TDS Compliance
Deduct Tax at Source on all applicable payments. For remittances to the Australian parent — management fees, accounting service charges, royalties, or interest — apply the DTAA rate of 15% (lower than the domestic 20% rate). Ensure you obtain a Tax Residency Certificate (TRC) from the ATO and file Form 10F with Indian tax authorities. File quarterly TDS returns (Forms 24Q, 26Q, 27Q).
Step 5: Transfer Pricing Documentation
Maintain contemporaneous transfer pricing documentation for all intercompany transactions. Australian companies frequently charge management fees, IT service costs, and shared accounting service fees to their Indian subsidiaries. Each category must be benchmarked at arm's length using methods such as the Transactional Net Margin Method (TNMM) or Cost Plus Method (CPM). File Form 3CEB by October 31 each year.
Step 6: Statutory Audit and Financial Statements
Prepare Ind AS-compliant annual financial statements — Balance Sheet, Profit & Loss Statement, Cash Flow Statement, Statement of Changes in Equity, and Notes. These must be audited by a practicing Chartered Accountant before the AGM (due by September 30). For the Australian parent's consolidation, prepare a separate AASB-aligned reporting package with all Ind AS-to-AASB adjustments documented.
Step 7: Annual Filings
Complete all annual filings: AOC-4 (within 30 days of AGM), MGT-7/MGT-7A (within 60 days of AGM), income tax return (by November 30 for TP cases), and the FEMA FLA return (by July 15). Coordinate with the Australian parent's July-June fiscal year to ensure timely consolidation.
Timeline and Costs for Australian Companies
Typical timeline and costs for accounting services for an Australian subsidiary in India:
| Activity | Timeline | Approximate Cost (Annual) |
|---|---|---|
| Chart of accounts setup and AASB mapping | 1-2 weeks | INR 25,000-50,000 (one-time) |
| Monthly bookkeeping and reconciliation | Ongoing | INR 15,000-40,000 per month |
| Monthly GST return filing | Monthly | INR 5,000-15,000 per month |
| Quarterly TDS return filing | Quarterly | INR 3,000-8,000 per quarter |
| Transfer pricing documentation and Form 3CEB | Annually by Oct 31 | INR 50,000-2,00,000 |
| Statutory audit | July-September | INR 50,000-1,50,000 |
| ROC annual filings (AOC-4, MGT-7) | Within 30/60 days of AGM | INR 10,000-25,000 |
| Income tax return | By November 30 | INR 15,000-40,000 |
| FEMA/FLA annual return | By July 15 | INR 10,000-20,000 |
| AASB consolidation package | Monthly or quarterly | INR 8,000-25,000 per month |
Total annual costs for comprehensive accounting for an Australian subsidiary in India typically range from INR 3,50,000 to INR 9,00,000, depending on transaction volumes, number of intercompany categories, and reporting frequency required by the Australian parent. For more context, see our blog on Accounting Costs for Foreign Subsidiaries in India.
Common Challenges for Australian Companies
Based on our experience helping Australian clients with their Indian accounting, here are the most common challenges:
1. India's GST Complexity vs. Australia's BAS Simplicity
Australia's GST is a single-rate (10%) system with quarterly Business Activity Statement (BAS) filing. India's GST, by contrast, has four rate slabs (5%, 12%, 18%, 28%), monthly filing deadlines, mandatory e-invoicing for companies above INR 5 crore turnover, and complex input tax credit reconciliation through GSTR-2B. Australian companies accustomed to the simplicity of BAS filing often find India's GST regime overwhelming. Working with an experienced Indian accounting firm is essential for avoiding compliance gaps.
2. Fiscal Year Mismatch
Australia follows a July-June fiscal year, while India mandates April-March. This creates a unique three-month overlap that differs from the typical European January-December vs. April-March gap. Australian parent companies need their Indian subsidiaries to provide quarterly consolidation data aligned to the July-June cycle, while simultaneously meeting Indian statutory deadlines based on the April-March year. Careful calendar management is critical.
3. Higher DTAA Withholding Rates
The India-Australia DTAA provides a 15% withholding rate on FTS, interest, and dividends — higher than the 10% rate available under many other DTAAs (Japan, Netherlands, Singapore). This makes the structuring of intercompany transactions more expensive for Australian companies compared to competitors from countries with more favorable treaty rates. Optimizing the mix of intercompany charges and considering the classification of services (whether they qualify as FTS or independent personal services) becomes particularly important.
4. AASB vs. Ind AS Carve-Outs
While both AASB and Ind AS are converged with IFRS, Ind AS has India-specific carve-outs that create reconciliation differences. Key areas include the treatment of compound financial instruments (Ind AS 32), government grant accounting (Ind AS 20), and the transition provisions for first-time adoption. These differences, while not as dramatic as the JGAAP or PCG mismatches faced by Japanese or French companies, still require systematic documentation for consolidation.
5. Transfer Pricing on Back-Office Services
Many Australian companies set up Indian operations specifically as back-office or shared service centers providing accounting, data processing, customer support, and IT services to the Australian parent. The transfer pricing of these services must reflect arm's length margins, and Indian authorities have been particularly aggressive in challenging low-margin captive service arrangements. Maintaining robust benchmarking studies that demonstrate appropriate cost-plus markups (typically 12-18% for routine services) is essential.
Why Choose BeaconFiling
BeaconFiling has significant experience supporting Australian companies with their Indian accounting and compliance needs. We understand the Australian business culture, AASB reporting requirements, and the specific challenges of the India-Australia tax treaty. Our services include:
- Ind AS-compliant accounting with AASB-aligned consolidation packages
- Monthly GST compliance including e-invoicing, GSTR-1, and GSTR-3B
- TDS management with DTAA-optimized withholding and Form 10F preparation
- Transfer pricing documentation, benchmarking, and Form 3CEB filing
- Statutory audit coordination, ROC filings, and income tax returns
- FEMA compliance, FLA returns, and RBI reporting
- Ongoing annual compliance management
Whether your Australian company is a large ASX-listed corporation or a growing mid-market firm with India ambitions, BeaconFiling ensures your Indian subsidiary's accounting is accurate, compliant, and seamlessly integrated with your Australian reporting. Visit our Australia country page for more on establishing operations in India from Australia.