India - Permanent establishment

Article 5. Permanent establishment

Definition permanent establishment (lid 1 en 2)

1. For the purposes of this Convention, the term "permanent
establishment" means a fixed place of business through which the
business of an enterprise is wholly or partly carried on.

2. The term "permanent establishment" includes especially:

a) a place of management;

b) a branch;

c) an office;

d) a factory;

e) a workshop;

f) a mine, an oil or gas well, a quarry or any other place of
extraction of natural resources;

g) a warehouse in relation to a person providing storage facilities
for others;

h) a premises used as a sales outlet;

i) an installation or structure used for the exploration of natural
resources provided that the activities continue for more than 183
days.

Representative office (3)

3. A building site or construction, installation or assembly project
constitutes a permanent establishment only where such site or
project continues for a period of more than six months.

Building site/ project (4)

4. Notwithstanding the preceding provisions of this Article, the term "permanent establishment" shall be deemed not to include:
a the use of facilities solely for the purpose of storage or display of goods or merchandise belonging to the enterprise;
b the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage or display;
c the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another
enterprise;
d the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting
information, for the enterprise l e) the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of
information, for scientific research, or for other activities which have a preparatory or auxiliary character, for the enterprise;
e the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs a) to e), provided
that the overall activity of the fixed place of business resulting from (his combination is of a preparatory or auxiliary character.

Agent (5)

5. Notwithstanding the provisions of paragraphs 1 and 2, where a
person - other than an agent of an independent status to whom
paragraph 6 applies - is acting in one of the States on behalf of an
enterprise of the other State, that enterprise shall be deemed to have
a permanent establishment in the firstmentioned State, if

a) he has and habitually exercises in that State an authority to
conclude contracts on behalf of the enterprise, unless his activities
are limited to the purchase of goods or merchandise for the
enterprise; or

b) he has no such authority, but habitually maintains in the firstmentioned State                                                                                                           a stock of goods or merchandise from which he
regularly delivers goods or merchandise on behalf of the enterprise.

Independent agent (6)

6. An enterprise of one of the States shall not be deemed to have a
permanent establishment in the other State merely because it carries
on business in that other State through a broker, general commission
agent or any other agent of an independent status, provided that such
persons are acting in the ordinary course of their business. However,
when the activities of such an agent are devoted wholly or almost
wholly on behalf of that enterprise, he will not be considered an
agent of an independent status within the meaning of this paragraph
if it is shown that the transactions between the agent and the
enterprise were not made under at arm's-length conditions.

Controlled company (7)

7. The fact that a company which is a resident of one of the States
controls or is controlled by a company which is a resident of the
other State, or which carries on business in that other State (whether
through a permanent establishment or otherwise), shall not of itself
constitute either company a permanent establishment of the other.