No PE in India of foreign digital platforms facilitating hotel bookings – Delhi bench of the Tribunal

In brief

The Delhi bench of the Income-tax Appellate Tribunal (Tribunal) concluded¹ that a non-resident company operating an online accommodation booking platform did not constitute a permanent establishment (PE) in India under the India–Netherlands Double Taxation Avoidance Agreement (DTAA). The Tribunal concluded that the taxpayer neither had a fixed place PE nor a dependent agent PE in India, as its digital platform and core business operations were located outside India. Accordingly, the Tribunal concluded that the commission income earned from the Indian accommodation providers is not taxable in India in the absence of a PE.