https://www.taxtmi.com/caselaws?id=753362 The Delhi HC held that guarantee charges received by a foreign parent company from its Indian subsidiaries under an Intra Group Parental Guarantee Agreement constitute income accruing in India and are taxable. The court determined that these charges were not "interest" under Article 12 of the DTAA since no debtor-creditor relationship existed between the parent and subsidiaries. The guarantee charges were payment for services provided in India - extending guarantees to overseas lenders for the benefit of Indian subsidiaries. The income source was the service agreement with Indian entities, making it taxable regardless of how the parent company utilized the funds to meet its overseas obligations. en-us Tue, 28 May 2024 00:00:00 +0530 Wed, 28 Aug 2024 11:13:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=753362 The Delhi HC held that guarantee charges received by a foreign parent company from its Indian subsidiaries under an Intra Group Parental Guarantee Agreement constitute income accruing in India and are taxable. The court determined that these charges were not "interest" under Article 12 of the DTAA since no debtor-creditor relationship existed between the parent and subsidiaries. The guarantee charges were payment for services provided in India - extending guarantees to overseas lenders for the benefit of Indian subsidiaries. The income source was the service agreement with Indian entities, making it taxable regardless of how the parent company utilized the funds to meet its overseas obligations. Case-Laws Income Tax Tue, 28 May 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=753362