India: Capital gains from transfer of derivatives not taxable under India-Mauritius treaty; seconded employees did not create PE in India (court decisions)
Summaries of recent court decisions
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September 3, 2025
The KPMG member firm in India prepared reports on the following recent court decisions:
- The Mumbai Tribunal held that (1) capital gains from a transfer of derivatives were not taxable in India under the India-Mauritius income tax treaty, (2) inland hauling charges inextricably linked to the taxpayer’s shipping business were not taxable in India under the India-UAE income tax treaty, and (3) gain allegedly realized from a company’s buyback of its shares was not taxable as “income from other sources.”
- The Delhi Tribunal held that employees of a Japanese company seconded to India did not constitute a permanent establishment (PE) in India.
- The Karnataka High Court held that the taxpayer’s secondment arrangement did not create a taxable supply subject to goods and services tax (GST).
Read the August 2025 report, which includes summaries of other cases involving direct and indirect tax issues.