Recent developments concerning tax treaties are as follows.
In ADIT v Mediterranean Shipping Co SA ITA No. 5300/Del 2010 SA was a Swiss ship chartering company. Indian domestic law taxes a non-resident on income derived from the carriage of passengers livestock mail or goods shipped to or from any Indian port. SA used an Indian company as its agent to assist with bookings freight sales and marketing for its Indian operations. On the facts it was SA’s dependent agent permanent establishment (PE) in India.
Although art 7.1 of the India/Switzerland treaty excluded international shipping profits from taxability in India art 22 (‘Other income’) basically restored taxability if SA carried on business through an Indian...
