| COURT: | Karnataka High Court |
| CORAM: | G. Narendar J, N. Kumar J |
| SECTION(S): | 9, Article 5 |
| GENRE: | International Tax |
| CATCH WORDS: | liaison office, permanent arrangement |
| COUNSEL: | P.J. Pardiwalla |
| DATE: | September 3, 2015 (Date of pronouncement) |
| DATE: | October 27, 2015 (Date of publication) |
| AY: | - |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| A liaison office of a foreign co which identifies a manufacturer in India, negotiates the price, helps in choosing raw material to be used, ensures compliance with quality and gets material tested is not a ‘permanent establishment’ under Article 5 of India-USA DTAA | |
If the petitioner has to purchase goods for the purpose of export, an obligation is cast on the petitioner to see that the goods, which are purchased in India for export outside India is acceptable to the customer outside India. To carry on that business effectively, the aforesaid steps are to be taken by the seller i.e., the petitioner. Otherwise, the goods, which are purchased in India may not find a customer outside India and therefore, the authority was not justified in recording a finding that those acts amounts to involvement in all the activities connected with the business except the actual sale of the products outside the country. In our considered information, all those acts are necessary to be performed by the petitioner – assessee before export of goods
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