On 18 December 2014, the Mumbai Tribunal held that employees seconded by a U.S. company to provide service to its group companies in India constitutes a permanent establishment (PE) in India, and the related payments are to be attributed to the PE and taxed as business profits and not as fees for technical services (FTS).
The case involved a U.S. company whose main business activity is to provide support services to group companies through the world. In the year at issue, the U.S. company se…