India: Intermittent use of premises of an Indian agent subject to its permission does not create PE (tribunal decision)
Mauritius-based company did not have a permanent establishment in India through the intermittent use of its Indian agent's premises.
The Mumbai Bench of the Income Tax Appellate Tribunal held that the taxpayer, a Mauritius-based company, did not have a permanent establishment (PE) or in India under the India–Mauritius income tax treaty either as a result of its use of its Indian agent’s premises, container storage arrangements, and operational control exercised through personnel (fixed place PE) or given the Indian agent’s role in negotiating contracts and managing end‑to‑end operations (dependent agent PE).
The tribunal concluded that the taxpayer’s intermittent use of its agent’s premises, subject to permission and without any right of disposal, did not satisfy the threshold for a fixed place PE. Further, the Indian agent was held to be an independent agent, as its activities were not devoted wholly or almost wholly to the taxpayer.
The case is: Bay Lines v. DCIT (International Tax) (IT(IT)A 520/Mum/2026)
Read a July 2026 report prepared by the KPMG member firm in India