India: Income from delivery order charges not subject to tax in India under UK treaty (tribunal decision)
Recent direct and indirect tax developments in India
The Delhi Tribunal held (ITA No. 2672/DEL/2023 and ITA No. 947/DEL/2025) that the taxpayer, a UK tax resident that operated aircraft in India, was not subject to tax in India under the India-UK income tax treaty on income earned from delivery order charges.
The tribunal agreed with the taxpayer that the delivery order charges received were directly connected to the taxpayer’s air cargo business and were thus not taxable in India under Article 8 of the treaty, and rejected the tax authority’s argument that the charges were derived from an activity subsequent to the transportation of goods in international traffic and thus not eligible for benefits under the treaty.
Read a December 2025 report prepared by the KPMG member firm in India, which includes summaries of other indirect and indirect tax developments.