Taxes Cant Be Levied If a Company Doesnt Have Any Presence In India ITAT

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Domestic taxes cannot be assessed if a corporation does not have a presence in India, according to a tax tribunal, providing much-needed clarity for companies that earn money through advertising.

20 November 2021 Current Affairs:Domestic taxes cannot be assessed if a corporation does not have a presence in India, according to a tax tribunal, providing much-needed clarity for companies that earn money through advertising.
 
Highlights:
♦ESPN, the sports channel, vs. the tax authorities were the subject of the tax tribunal’s decision.
♦ESPN cannot be taxed in India since it does not have a permanent establishment (PE) or a commercial tie, according to the Delhi Income Tax Appellate Tribunal (ITAT).
♦PE is a tax concept that decides which jurisdiction has the authority to tax a firm first.
♦According to the facts of the lawsuit, ESPN was selling ad time and program sponsorship to India through a Mauritius-based business.
♦ESPN Software India, an Indian company, was operating as a middleman.
♦ESPN Software India would purchase advertising time from the Mauritius business or sell it to an Indian advertising agency.
 

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