In a tax dispute arising out of global business transactions, the Supreme Court has declined to entertain a petition of US company Columbia Sportswear raising various questions on the RBI guidelines for assessment of tax liabilities of foreign entities on their business operations in India.
The issue had arisen in the wake of the pointed rulings of the Authority for Advance Rulings (Income Tax) against Columbia Sportswear about its tax liabilities arising out if its transactions in India.
The US company had initially established a liaison office (LO) in Chennai in 1995 with a plea that it needed to inspect the quality of goods before shipments.
Later the company had opened another LO in Bangalore in 2000.
The RBI had set out certain guidelines while granting permission for establishing the liaison office.
A bench of Chief Justice of India S. H.Kapadia and Justices A. K. Patnaik and Swatanter Kumar declined to entertain Columbia Sportswear’s special leave petition against the AAR(IT) order directly in the apex court bypassing the High Court, saying that there was no “substantial” question of general importance involved in the matter after the RBI had laid down the guidelines. The US firm can move high court if it wants to take up the case.