Facts
- The applicant is a non-resident shipping Company incorporated under the laws of Switzerland and is in the business of shipping contracts for the transportation of cargo worldwide. During the financial years 2007-08 and 2008-09, the applicant entered into a shipping contract for transportation of cargo from Indian ports to China.
- The amount of freight for transportation of cargo from the Indian port to a port outside India was invoiced and received by the applicant.
- For the relevant years the applicant appointed a port agent in India for handing the cargo. The port agent on behalf of the applicant, deposited tax at 7.5% of the freight charges received by the applicant, under section 172 of the Income tax Act, 1961(„the Act?)
- The applicant filed the returns of income through the port agent under Section 172(3) of the Act. An assessment order was passed by the Assistant Commissioner of Income Tax under Section 172(4) for the assessment year 2008-09.
Issues before the Authority for Advance Ruling (‘AAR’)
- Whether during the relevant years, the applicant, in the stated facts and circumstances, had a Permanent Establishment in India under Article 5 of India-Switzerland Double Taxation Avoidance Agreement (‘DTAA’) in relation to activity of charter of vessels for transporting cargoes from Indian ports to outside India?
- If the answer to the first question is negative, whether income of the applicant from such charter of vessels is not liable to tax in India under the DTAA
Relevant provisions
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