ITAT Delhi holds that hotel liaison services by Expedia India don’t constitute a dependent agent permanent establishment under India-Switzerland DTAA.
Indian Support Services Don’t Create Expedia’s PE: ITAT Delhi
The ITAT, Delhi, ruled that the activities of Expedia India—providing hotel liaison and customer support—did not result in a dependent agent permanent establishment (PE) for its foreign parent under the India–Switzerland Double Taxation Avoidance Agreement (DTAA). The tribunal accordingly rejected revenue’s claim to attribute ₹44.44 lakh as business profits to India.
The revenue relied on control and dependency arguments, alleging that the Indian entity acted habitually in the course of its business on behalf of the foreign enterprise. The tribunal found no binding authority conferred on Expedia India and noted that decisions on pricing, inventory, and contracts remained with the foreign entity.
Implication: This decision provides clarity for MNEs using Indian service hubs for non-core, supportive functions. As long as the entity lacks authority to negotiate and bind the principal, dependent agent PE risks remain low.
