Delhi HC rejects tax plea against Western Union

The Delhi high court rejected a plea by the income tax department against American multinational Western Union Financial Services, citing provisions of the India-US double taxation avoidance agreement (DTAA).

- Krishna Yadav

The court on 18 December held that Western Union did not have a so-called permanent establishment (PE) in India and, therefore, could not be taxed under the Income Tax Act, 1961, for transactions between 2001 and 2016.

The high court bench ruled that the mere provision of software by a foreign company to its Indian agents did not constitute a PE to attract tax liability.