{"id":815,"date":"2015-12-19T12:25:41","date_gmt":"2015-12-19T12:25:41","guid":{"rendered":"http:\/\/carajput.com\/blog\/?p=815"},"modified":"2021-12-16T19:22:12","modified_gmt":"2021-12-16T13:52:12","slug":"western-union-profits-to-business-operations-not-to-taxed-in-india","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/western-union-profits-to-business-operations-not-to-taxed-in-india\/","title":{"rendered":"Western Union operations Profits not to taxed in India"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e778e8e4db2\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e778e8e4db2\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/western-union-profits-to-business-operations-not-to-taxed-in-india\/#IN_THE_ABSENCE_OF_ANY_PE_IN_INDIA_PROFITS_OF_WESTERN_UNION_IF_ANY_ATTRIBUTABLE_TO_THE_BUSINESS_OPERATIONS_COULD_NOT_BE_TAXED_IN_INDIA\" title=\"IN THE ABSENCE OF ANY PE IN INDIA, PROFITS OF WESTERN UNION (IF ANY, ATTRIBUTABLE TO THE BUSINESS OPERATIONS) COULD NOT BE TAXED IN INDIA\">IN THE ABSENCE OF ANY PE IN INDIA, PROFITS OF WESTERN UNION (IF ANY, ATTRIBUTABLE TO THE BUSINESS OPERATIONS) COULD NOT BE TAXED IN INDIA<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/western-union-profits-to-business-operations-not-to-taxed-in-india\/#Facts_of_the_Case\" title=\"Facts of the Case\">Facts of the Case<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/western-union-profits-to-business-operations-not-to-taxed-in-india\/#Decision_of_the_Tribunal\" title=\"Decision of the Tribunal\">Decision of the Tribunal<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/western-union-profits-to-business-operations-not-to-taxed-in-india\/#Read_our_articles_Top_Taxation_Relaxation_to_MSMS\" title=\"Read our articles: \u00a0Top Taxation Relaxation to MSMS\">Read our articles: \u00a0Top Taxation Relaxation to MSMS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/western-union-profits-to-business-operations-not-to-taxed-in-india\/#Highlights_of_International_Taxation\" title=\"Highlights of International Taxation\">Highlights of International Taxation<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h3><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/12\/35.png\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-9033\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/12\/35.png\" alt=\"www.carajput.com; Business Operation\" width=\"822\" height=\"293\" \/><\/a><\/h3>\n<h2 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"IN_THE_ABSENCE_OF_ANY_PE_IN_INDIA_PROFITS_OF_WESTERN_UNION_IF_ANY_ATTRIBUTABLE_TO_THE_BUSINESS_OPERATIONS_COULD_NOT_BE_TAXED_IN_INDIA\"><\/span><span style=\"color: #000080;\"><strong>IN THE ABSENCE OF ANY PE IN INDIA, PROFITS OF WESTERN UNION (IF ANY, ATTRIBUTABLE TO THE BUSINESS OPERATIONS) COULD NOT BE TAXED IN INDIA<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><strong>DDIT v. Western Union Financial Services Inc.\u00a0 Date of Decision: December 10, 2015<\/strong><\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Facts_of_the_Case\"><\/span><span style=\"color: #808000;\"><strong><span style=\"text-decoration: underline;\">Facts of the Case<\/span><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\">Western Union Financial Services Inc. (&#8216;Western Union&#8217;), incorporated in USA, was engaged in the business of rendering money transfer services. In order to provide said services to citizens of the USA desirous of remitting money to India, Western Union had set-up a liaison office (LO) in India. It appointed agents in India and provided them software (Voyager) to access its mainframes in the USA. The agents were paid commission on completion of money transfer transactions. Western Union filed its return declaring &#8216;nil&#8217; income by contending that it was not liable to pay any tax in India on income arising from money transfer services as it didn&#8217;t have any permanent establishment (PE) in India.<\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Decision_of_the_Tribunal\"><\/span><span style=\"color: #808000;\"><strong><span style=\"text-decoration: underline;\">Decision of the Tribunal<\/span><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\">The Appellate Tribunal held that albeit Western Union had business connection in India in terms of section 9 of the Income-tax Act 1961, yet it did not have a PE in India under India-USA DTAA. Western Union could not be said to have fixed place PE in India as it did not have its own outlet in India and it was carrying on its business through agents appointed in India.<\/p>\n<p style=\"text-align: justify;\">Moreover, the LO could not be considered as Western Union&#8217;s PE in India as it carried out activities which were of a preparatory or auxiliary arachcter. It had not carried on any trading activity for the assessee in India.<\/p>\n<p style=\"text-align: justify;\">The Tribunal also observed that the software was the property of the Western Union and it had not parted with its copyright therein in favour of the agents.<\/p>\n<p style=\"text-align: justify;\">Mere use of the software by the agents in order to gain access to the mainframe computers in the USA from the premises of the agents could not lead to the decision that the premises-cum-software would be the PE of the assessee in India.<\/p>\n<p style=\"text-align: justify;\">It was further held that the agents appointed by Western Union were acting in the ordinary course of their business and their activities were not devoted wholly or almost wholly to the Western Union.<\/p>\n<p style=\"text-align: justify;\">Further, commissions were paid to them at arm&#8217;s length price. Therefore, the agents were independent agents under Article 5.5 of the India-USA DTAA.\u00a0 Hence, in the absence of any PE in India, the profits of the Western Union, if any, attributable to the business operations could not be taxed in India.<\/p>\n<p style=\"text-align: justify;\">For query or help, contact: <a href=\"mailto:singh@carajput.com\">singh@carajput.com<\/a>\u00a0or call at 9555555480<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Read_our_articles_Top_Taxation_Relaxation_to_MSMS\"><\/span>Read our articles: \u00a0<a href=\"https:\/\/carajput.com\/blog\/relevant-parts-of-the-honorable-fm-press-conference\/\">Top Taxation Relaxation to MSMS<\/a><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<h4><span class=\"ez-toc-section\" id=\"Highlights_of_International_Taxation\"><\/span><a href=\"https:\/\/carajput.com\/blog\/international-taxation\/\">Highlights of International <\/a><a href=\"https:\/\/www.caindelhiindia.com\/blog\/presumptive-taxation-section-44ad-44ada-44ae\/\">Taxation<\/a><span class=\"ez-toc-section-end\"><\/span><\/h4>\n","protected":false},"excerpt":{"rendered":"<p>IN THE ABSENCE OF ANY PE IN INDIA, PROFITS OF WESTERN UNION (IF ANY, ATTRIBUTABLE TO THE BUSINESS OPERATIONS) COULD NOT BE TAXED IN INDIA DDIT v. Western Union Financial Services Inc.\u00a0 Date of Decision: December 10, 2015 Facts of the Case Western Union Financial Services Inc. (&#8216;Western Union&#8217;), incorporated in USA, was engaged in &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[3863,3865],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/815"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=815"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/815\/revisions"}],"predecessor-version":[{"id":19991,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/815\/revisions\/19991"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=815"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=815"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=815"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}