The Resource Centrica India Offshore Private Ltd v Commissioner of Income Tax and others : WP(C) No. 6807/2012

Centrica India Offshore Private Ltd v Commissioner of Income Tax and others : WP(C) No. 6807/2012

Label
Centrica India Offshore Private Ltd v Commissioner of Income Tax and others : WP(C) No. 6807/2012
Title
Centrica India Offshore Private Ltd v Commissioner of Income Tax and others : WP(C) No. 6807/2012
Creator
Contributor
Subject
Language
eng
Summary
Judgment by the High Court of Delhi at New Delhi, judgment date 25 April 2014. Centrica plc was a UK company. It and its associated enterprises supplied gas and electricity in the UK and in Canada. Some back office functions, such as billing and payment enquiries were carried out by businesses in India. Centrica set up an Indian company, CIOP, which was to manage the contracts with the back office service providers and to provide advice to Centrica and its overseas affiliates. CIOP charged Centrica the costs of providing these services plus a mark-up of 15 per cent. Centrica and its affiliates then seconded personnel to CIOP to ensure standards and compliance with technical and other procedures. These secondments were for a fixed term and their salaries and benefits continued to be paid by the overseas entities. CIOP made payments to the overseas entities which were equivalent to the emoluments of the secondees with no mark up. CIOP declared that the secondees were its employees and their salaries taxable in India: the payments via the overseas entities were a matter of convenience. The Revenue assessed Centrica and affiliates on the basis that the secondees remained their employees and that the payments were payments for technical or consultancy services which would mean the overseas entities had a services PE in India under article 12 of the India-Canada double taxation agreement and article 13 of the India-UK double taxation agreement. Centrica appealed against the assessments. This Delhi High Court judgment confirms a ruling of Authority for Advance Rulings (AAR) that a service PE is constituted due to employees being present in India under a secondment agreement. The court has also ruled that the reimbursement of salary costs can be characterised as fees for technical services
Citation source
In: International tax law reports. - London. - Vol. 16 (2014),
http://bibfra.me/vocab/relation/comm
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http://library.link/vocab/creatorName
Goradia, S
Language note
English
http://library.link/vocab/relatedWorkOrContributorName
Baker, P
http://library.link/vocab/subjectName
  • case law
  • tax treaty
  • PE
  • services PE
  • secondment
  • advance tax ruling
Label
Centrica India Offshore Private Ltd v Commissioner of Income Tax and others : WP(C) No. 6807/2012
Instantiates
Publication
Label
Centrica India Offshore Private Ltd v Commissioner of Income Tax and others : WP(C) No. 6807/2012
Publication

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