{"id":936,"date":"2015-12-30T07:49:44","date_gmt":"2015-12-30T02:19:44","guid":{"rendered":"http:\/\/carajput.com\/blog\/?p=936"},"modified":"2021-11-13T16:15:46","modified_gmt":"2021-11-13T10:45:46","slug":"indian-agent-procuring-ad-air-time-for-national-geographic-fox-channel-held-as-agency-pe-of-foreign-co","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/indian-agent-procuring-ad-air-time-for-national-geographic-fox-channel-held-as-agency-pe-of-foreign-co\/","title":{"rendered":"INDIAN AGENT PROCURING AD AIR TIME FOR NATIONAL GEOGRAPHIC"},"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-69db80b4b8836\" 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-69db80b4b8836\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/indian-agent-procuring-ad-air-time-for-national-geographic-fox-channel-held-as-agency-pe-of-foreign-co\/#INDIAN_AGENT_PROCURING_AD_AIR_TIME_FOR_NATIONAL_GEOGRAPHIC_FOX_CHANNEL_HELD_AS_AGENCY_PE_OF_FOREIGN_CO\" title=\"INDIAN AGENT PROCURING AD AIR TIME FOR NATIONAL GEOGRAPHIC &amp; FOX CHANNEL HELD AS AGENCY PE OF FOREIGN CO\">INDIAN AGENT PROCURING AD AIR TIME FOR NATIONAL GEOGRAPHIC &amp; FOX CHANNEL HELD AS AGENCY PE OF FOREIGN CO<\/a><ul class='ez-toc-list-level-2'><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/indian-agent-procuring-ad-air-time-for-national-geographic-fox-channel-held-as-agency-pe-of-foreign-co\/#Decision_of_the_Tribunal\" title=\"Decision of the Tribunal\">Decision of the Tribunal<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h3 style=\"text-align: justify;\"><\/h3>\n<figure id=\"attachment_9012\" aria-describedby=\"caption-attachment-9012\" style=\"width: 799px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/12\/26-1.png\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-9012\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/12\/26-1.png\" alt=\"www.carajput.com; Strategy\" width=\"799\" height=\"466\" \/><\/a><figcaption id=\"caption-attachment-9012\" class=\"wp-caption-text\">www.carajput.com; Strategy<\/figcaption><\/figure>\n<h1 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"INDIAN_AGENT_PROCURING_AD_AIR_TIME_FOR_NATIONAL_GEOGRAPHIC_FOX_CHANNEL_HELD_AS_AGENCY_PE_OF_FOREIGN_CO\"><\/span><span style=\"color: #000080;\"><strong>INDIAN AGENT PROCURING AD AIR TIME FOR NATIONAL GEOGRAPHIC &amp; FOX CHANNEL HELD AS AGENCY PE OF FOREIGN CO<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><span style=\"color: #000000;\">NGC Network Asia LLC v. JDIT [Mumbai ITAT]<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">ITA No. 7994 of 2011 &amp; 7631 of 2012<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">Date of Decision: December 16, 2015<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #993300;\"><strong><span style=\"text-decoration: underline;\">Facts of the Case<\/span><\/strong><\/span><\/p>\n<p style=\"text-align: justify;\">NGC Network Asia LLC (&#8216;NGC Asia&#8217;), a US based company, was engaged in broadcasting of National Geographic channel and Fox International Channel.<\/p>\n<p style=\"text-align: justify;\">It had sold the entire &#8216;advertisement air time&#8217; of its channels for a lump sum consideration to its associated enterprise in India, namely, NGC Network (India) <a href=\"https:\/\/www.caindelhiindia.com\/blog\/why-needed-to-register-a-private-limited-company\/\">Private Limited<\/a> (&#8216;NGC India&#8217;).<\/p>\n<p style=\"text-align: justify;\">Assessee was of the view that income received by it from sale of &#8216;advertisement air time&#8217; was not taxable in India as &#8216;advertisement air time&#8217; would amount to &#8216;goods&#8217; which was transferred to NGC India on principal to principal basis.<\/p>\n<p style=\"text-align: justify;\">Therefore, NGC India could not treated as its Permanent Establishment (PE) and, accordingly, business income from selling of &#8216;advertisement air time&#8217; could not taxed in India.<\/p>\n<p>&nbsp;<\/p>\n<h2 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Decision_of_the_Tribunal\"><\/span><span style=\"color: #993300;\"><strong><span style=\"text-decoration: underline;\">Decision of the Tribunal<\/span><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p style=\"text-align: justify;\">The Appellate Tribunal held that one of the main characteristics of &#8220;goods&#8221; is that it should be capable of being &#8220;consumed&#8221; or &#8220;used&#8221; independently by the buyer thereof.<\/p>\n<p style=\"text-align: justify;\">Albeit, the &#8216;advertisement air time&#8217; might be capable of being transferred, but the same could not be consumed\/used by the buyer without the assistance from the assessee by way of telecasting the same in the television channels.<\/p>\n<p style=\"text-align: justify;\">Thus, the concept of purchase and sale of goods, could not be applied to the facts of the instant case. Accordingly, NGC India was only enabling the assessee to procure the advertisements for telecasting them.<\/p>\n<p style=\"text-align: justify;\">hence, the NGC India could not be considered as selling advertisement airtime independent of the assessee.<\/p>\n<p style=\"text-align: justify;\">Therefore, NGC India could not be considered to be &#8220;an independent principal\/agent&#8221; of assessee.<\/p>\n<p style=\"text-align: justify;\">The Tribunal further held that NGC India habitually exercises in India an authority to conclude contracts on behalf of the assessee and the same would be binding on the assessee, since it had agreed to broadcast the advertisements procured by NGC India.<\/p>\n<p style=\"text-align: justify;\">Thus, NGC India should be classified as &#8220;dependent agent&#8221; of the assessee in terms of Article 5(4)(a) of the India-US DTAA and, accordingly, business income from selling of &#8216;advertisement air time&#8217; had to be attributed to assessee&#8217;s PE in India.<\/p>\n<p style=\"text-align: justify;\">The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.<\/p>\n<p style=\"text-align: justify;\">Hope the information will assist you in your Professional endeavors. For query or help, contact: <a href=\"mailto:singh@carajput.com\">singh@carajput.com<\/a>\u00a0or call at 9555555480<\/p>\n<p>Read our articles: \u00a0<a href=\"https:\/\/carajput.com\/blog\/relevant-parts-of-the-honorable-fm-press-conference\/\">Top Taxation Relaxation to MSMS<\/a><\/p>\n<p><a href=\"https:\/\/carajput.com\/blog\/international-taxation\/\">Highlights of International Taxation<\/a><\/p>\n<p style=\"text-align: justify;\">\n","protected":false},"excerpt":{"rendered":"<p>INDIAN AGENT PROCURING AD AIR TIME FOR NATIONAL GEOGRAPHIC &amp; FOX CHANNEL HELD AS AGENCY PE OF FOREIGN CO NGC Network Asia LLC v. JDIT [Mumbai ITAT] ITA No. 7994 of 2011 &amp; 7631 of 2012 Date of Decision: December 16, 2015 Facts of the Case NGC Network Asia LLC (&#8216;NGC Asia&#8217;), a US based &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[150,9,1],"tags":[3812,3809,3811,9090],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/936"}],"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=936"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/936\/revisions"}],"predecessor-version":[{"id":18765,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/936\/revisions\/18765"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=936"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=936"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=936"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}