AAR held that the applicant had a permanent establishment in India under the provisions of article 5 of the DTAA in respect of the services rendered with regard to use of a global network and infrastructure to process card payment transactions for customers in India. There was a fixed place permanent establishment, service permanent establishment and dependent agent permanent establishment.On such attribution of income to the permanent establishment, the tax was required to be withheld at full applicable rate at which the non-resident is subjected to tax in India.Even automatic equipment like server can also create a permanent establishment and there was no requirement of human intervention.
Mastercard Asia Pacific Pte. Ltd. Singapore, In Re (2018) 406 ITR 43/ 303 CTR 305/ 167 DTR 321 (AAR)
S. 9(1)(i): Income deemed to accrue or arise in India – Permanent Establishment -Global payment solutions facilitating use of electronic forms of Payment, ie by credit card, instead of cash and cheques -Banks and financial Institutions – There was a fixed place permanent establishment, service permanent establishment and dependent agent permanent establishment-On such attribution of income to the permanent establishment, the tax was required to be withheld at full applicable rate at which the non-resident is subjected to tax in India. Even automatic equipment like server can also create a permanent establishment and there was no requirement of human intervention- DTAA-India -Singapore [ Art. 5, 7, 12 ]