India: No dependent agent permanent establishment under India-Mauritius tax treaty (tribunal decision)

The taxpayer did not have a dependent agent permanent establishment in India under Article 5(4) of the India-Mauritius income tax treaty.

Under India-Mauritius tax treaty (tribunal decision)

The Mumbai Bench of the Income-tax Appellate Tribunal held that the taxpayer did not have a dependent agent permanent establishment in India under Article 5(4) of the India-Mauritius income tax treaty.

The case is: Taj TV Limited v. DCIT.

The taxpayer is a Mauritius-based entity engaged in the business of telecasting the sports channel “Ten Sports.” The taxpayer appointed an Indian entity as an agent to sell commercial advertisement time in India.

The tribunal found that the Indian entity did not constitute a dependent agent permanent establishment in India of the taxpayer because the Indian entity did not habitually exercise the authority to conclude contracts on behalf of the taxpayer.

In addition, the tribunal observed that the Indian entity was remunerated at an arm’s length price and thus no further profit would have been attributed to the Indian entity.

Read an April 2022 report [PDF 481 KB] prepared by the KPMG member firm in India

 

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