Tax Treaty Case Law around the Globe 2022

5.1. Introduction

Engineering, procurement and construction (EPC) in the infrastructure and petroleum sector is a recurrent theme in the Indian context and has spawned any number of litigations from the taxation point of view. Over the years, courts and tribunals have tried to resolve some of the various conflicts that arise in the matter of interpretation but at times with contradictory results. Considerable sums of money are involved in these cases, with the obvious attempts at substantial tax planning and novel arguments.

In treaty situations, the Indian revenue generally tends to assert the existence of some kind of PE and then ask for the allocation of a portion of the accrued profits from the operation. The present case, Technip France SAS involving the provision of supply of equipment and services under a composite turnkey contract involving a French company and an India company in the oil sector, is somewhat different in that in this case, it is conceded that a PE already exists. But does that guarantee adequate allocation of income? This case is an interesting study considering the relative novelty of the arguments to shelter the offshore services income of the multinationa...