ABC Vs. STATE

JUDGEMENT

(1.) 1. In this application under s. 245Q(1) of the IT Act, 1961 (for short "the Act'), the applicant, (omitted), is an Indian company (hereinafter termed as "Indian JV Company"). It is a joint venture of a US JV Partner which is an American company holding 60 per cent equity shares and, Indian JV Partner, another Indian company, having 40 per cent equity shares. The US JV Partner is engaged in the business of international integrated transportation services. The Indian JV Partner is engaged in the business of a general sales agent for and on behalf of international and domestic airline companies in India. The American company is also another company incorporated in and, a tax resident of the USA (referred to in this ruling as 'the American company'). All these and some other companies are members of an international group of companies which are engaged in the business of international transportation services and use an international group logo/trademark. On 30th Oct., 2000, the applicant entered into an agreement with the American company in regard to the international transportation services (hereinafter referred to as 'the transportation agreement') for the movement of parcels/packages within and outside India. Under the agreement, the applicant is to provide services to the American company for transportation of packages in India and the American company has to provide services to the applicant for transportation of packages throughout the world. For the services rendered by the American company to the applicant in respect of outbound consignments, it would make payment; so also the American company would pay to the applicant for the services rendered by it in respect of inbound consignments. The applicant and the American company work on principal to principal basis. The American company does not own or otherwise operate through any business premises in India. From January, 2001, the applicant has been carrying on business operations of international/domestic transportation of packages. On these facts, the applicant sought ruling of the Authority on the following question :

(2.) The applicant requested the Authority to reframe the said question as under and there being no objection from the Revenue, the same is reframed as requested :

(3.) IN the rejoinder of the applicant, it is denied that the CEO and the general managers of the applicant are deputed by the American company. It is also denied that the directors of the applicant are nominated by the American company. IN regard to the international group logo, it is stated that the applicant being a member of the international group, is allowed to use the international group logo for carrying out its business activities in INdia like any other member of the group. It is pointed out that in respect of outbound consignments, the applicant picks up the parcels/packages in INdia and raises invoices on its customers. There is privity of contract between the applicant and the INdian customers. The applicant is responsible to the INdian customers for transportation of packages and also for the risk pertaining to the loss and damage to the consignments. It is submitted that the outbound consignments are not handed over to the American company but are rendered to international airline/onboard courier for transportation and delivery outside INdia. INsofar as the inbound consignments are concerned, the American company picks up parcels/packages from various customers of foreign countries and renders them to international airlines/onboard couriers for delivery in INdia. It is only after the consignments reach INdia that the applicant clears them by filing necessary documents and takes steps for delivery of the parcels to the consignees. The applicant collects charges, taxes, duties, etc. which it incurs on behalf of consignees and takes the risk in regard thereto. The applicant and the American company are distinct separate legal entities and they work together as a global network on principal to principal basis. The applicant cannot, therefore, be treated as an agent of the American company in INdia.