Treaty between India and Indonesia – Characterization of income from information supply for treaty purposes

The Income Tax Appellate Tribunal (ITAT) issued its decision on 16 January 2013 in the case of CIT v. P.T.Mckinsey Indonesia (ITA No. 7625/Mum/2010) that consideration for collating and supply of information would not be taxable under article 7 of the India-Indonesia tax treaty (the Treaty) in the absence of a permanent establishment (PE) in India.

(a) Facts. The Taxpayer (i.e. P. T. Mckinsey Indonesia), a company incorporated in Indonesia, was engaged in the business of providing strategi…