In Brief
The Union of India appealed against a High Court decision regarding whether a UAE-based money exchange center's liaison office in India constituted a permanent establishment subject to Indian taxation. The Supreme Court upheld the High Court's dismissal. The Court held that the liaison office, which facilitated remittances by coordinating with the main server in UAE, engaged only in preparatory or auxiliary activities. Under the India-UAE Double Tax Avoidance Agreement, such fixed places of business are expressly excluded from permanent establishment status and therefore cannot be taxed in India, even though the office had both virtual and physical presence.
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