The Delhi bench of the Income Tax Appellate Tribunal (ITAT) declared that the Western Union is to do ITR Filing for profits earned in India. The business of the assessee includes the transfer of money across international borders: the assessee, a US company, deals in the business of rendering money transfer services In this article, we will read about the reasons why Western Union Profit not taxed in India.
Know About Western Union
The assessee(Western Union) is a corporation based in the United States that provides money transfer services. The assessee’s business includes money transfers across international boundaries. The assessee had engaged into agreements appointing agents in India in order to conduct business in India. These are as follows –
- Department of posts,
- commercial banks,
- non-banking financial firms,
- and tour operators
Assessment Officer on Taxing Western Union
During the assessment process, the Assessing Officer determined that the assessee company had a Permanent Establishment (PE) in India in the form of a fixed place PE under Article 5 of the India-US Double Taxation Avoidance Agreement (DTAA) due to the use of software developed and owned by the assessee in India. The Assessing Officer also highlighted the presence of agency PE due to the presence of agents working in India. As a result, the Assessing Officer determined that the assessee’s commission revenue received from its operations in India was taxable in India.
Western Union’s Reply
According to the company’s counsel, Dinesh Vyas, Westerns Union’s office in India was not undertaking any commercial activity, and its agents were only assisting in money transfers. So, Western Union Profit not taxed in India is applicable here. As per the double taxation avoidance treaty between India and the US, The Company’s operations were exempt.
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