The Mumbai Bench of the Income-tax Appellate Tribunal held that income arising from container services cannot be treated as income arising from a shipping business because the taxpayer did not own, charter or lease any vessel or ship.
The tribunal found that the taxpayer was simply providing container services to various clients, and hence, the provisions of section 44B of the Income-tax Act, 1961 were not applicable. The tribunal concluded that the income was taxable as business income; however; absent a permanent establishment under the India-Singapore income tax treaty, none of the income was taxable in India. The case is: Forbes Container Line Pte. Ltd.
Read a March 2016 report [PDF 308 KB] prepared by the KPMG member firm in India: Income arising from container services is not taxable under Section 44B of the Income-tax Act. In the absence of a PE under the India-Singapore tax treaty, the business income is not taxable in India
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.