COLUMBIA SPORTSWEAR COMPANY Vs. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION)

JUDGEMENT

(1.) THE applicant is a company incorporated under the laws of United States of America. It is a tax resident of USA. It is a multinational wholesaler and retailer of active outdoors apparel with operations in North America, Europe and Asia. It has earned an international reputation for quality, performance, functionality and value. It is one of the largest outerwear manufacturers in the world as well as a leading seller of skiwear in the USA. The applicant is engaged in creating innovative products and undertakes research and development to develop marketable products. This is done outside India.

(2.) IN the year 1995, the applicant established a liaison office in Chennai for undertaking liaison activities in connection with purchase of goods in India. The liaison activities have subsequently been expanded to Bangladesh and Egypt. Besides coordinating purchase of goods from India, the Indian liaison office also assists the applicant in purchase of goods from Egypt and Bangladesh and engages in quality monitoring and production monitoring of goods purchased from these countries. The goods procured from Egypt and Bangladesh do not come to India but are directly sold to the applicant in the United States. In the year 2000, a support office was opened by the Indian liaison office in Bangalore with the approval of the Reserve Bank of India. The applicant will be moving its liaison office in India to Bangalore. The Indian liaison office of the applicant has about 35 employees including 5 administrative staff. The liaison office is principally divided into 5 teams:

(3.) ON these facts the applicant approached this Authority essentially seeking a ruling on the question whether in the nature of the activities carried on by the liaison office it could be understood as a permanent establishment of the applicant and whether any income can be said to accrue or arise in India to the applicant, liable to be taxed in India.