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2018 (6) TMI 209 - AAR - Income TaxPermanent Establishment (PE in India) - scope of the agreement - payments received by the Applicant from the Indian hotel owner for provision of global reservation services (‘GRS’) - DTAA between India and Luxembourg - Royalty / Fee for technical services (FTS) - Held that:- the Indian hotel, Swissotel Kolkata,satisfies all the three tests and does constitute a fixed place PE of the Applicant with respect to these incomes. The Applicant is carrying on its entire business operations from this fixed place. The existence of a PE of the Applicant in India gets established within the meaning of Article 7 of the DTAA. We have held that the income of the Applicant is attributable to the fixed place PE in India, the question whether it can be characterised as ‘royalty’ or ‘fees for technical services’ becomes wholly academic. The payments received by the Applicant from the Indian hotel owner for provision of global reservation services (‘GRS’) would be chargeable to tax in India under section 9(1)(i) read with Articles 5 and 7 of the India-Luxembourg DTAA as business income and is attributable to the Applicant’s permanent establishment in India. In view of this, the question whether these payments would be characterised as ‘royalty’ or ‘fees for technical services’ becomes wholly academic, and is, therefore, not considered necessary to be answered.
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