Hire Charges of vessel does not constitute ‘Royalty’ under India-Singapore DTAA
As held by the Hon’ble Delhi Tribunal in Kreuz Challenger Pte. Ltd v ACIT [2024]
Key facts and analysis
1. Hire charges of a vessel does not constitute ‘Royalty’. Would be in the nature of business income
2. As there is no Permanent Establishment [PE] – no taxability arise on account of business income
3. Even if it assessable under section 44BB, as there is no PE no taxability in India
4. Taking the lower deduction certificate u/s 197 of the Income tax Act [‘Act’] cannot be the basis to tax the person under the Act.
The copy of the order is as under:
