India: No permanent establishment under India-Singapore tax treaty (tribunal decision)
A tribunal decision concerning permanent establishment under India-Singapore tax treaty
A tribunal decision concerning permanent establishment under India-Singapore tax treaty
The Delhi Bench of the Income-tax Appellate Tribunal held that an Indian entity did not constitute a fixed place permanent establishment of the taxpayer in India under the India-Singapore income tax treaty because the sales effected by the Indian entity were on its own independent status.
The case is: AB Sciex Pte Ltd. v. ACIT.
The tribunal found that the products purchased by the Indian entity and kept in its inventory could not be considered products belonging to the taxpayer. Rather, the sales transactions were on a principal-to-principal basis for resale by the Indian entity to Indian customers. In addition, the taxpayer did not have a warehouse or sales outlet in India to constitute a fixed place permanent establishment in India under Article 5(1) of the treaty.
Further, the tribunal held that the Indian entity could not be treated as dependent agent permanent establishment of the taxpayer under the treaty since it was not habitually exercising authority to conclude contract on behalf of the taxpayer.
Read a May 2022 report [PDF 582 KB] prepared by the KPMG member firm in India
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