Taxation
Income of company with no presence in India is not taxable: ITAT
New Delhi/IBNS: A tax tribunal has ruled that domestic taxes cannot be levied on a company that doesn't have any presence in India, media reports said.
The ruling was given by the Delhi Income Tax Appellate Tribunal (ITAT) in the case of ESPN, the sports channel, versus the tax authorities, ET reported.
The tribunal held that ESPN did not have a permanent establishment (PE) in India or a business connection in India, hence domestic taxes cannot be levied on the company.
The report said ESPN was selling advertisement slots and programme sponsorship in India through an Indian company-ESPN Software India.
The intermediary company would acquire advertisement time from the Mauritius entity or would further sell that to Indian advertising agencies, said the ET report.
The tax department contended that the income generated in this way is taxable as the payment was made by the Indian companies for the advertisements.
But the tribunal ruled ESPN was covered under India's tax treaty-double tax avoidance agreement (DTAA)-with Mauritius, and that India doesn't have a right to tax the company, stated the ET report.
Support Our Journalism
We cannot do without you.. your contribution supports unbiased journalism
IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.
Support objective journalism for a small contribution.
