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K Ramachandran appointed part-time chairman of Tamilnad Mercantile Bank
While the appointment as Additional Director will be for three years from Friday, the appointment as Part-Time Chairman will be effective from the date of approval by the Reserve Bank of India (RBI), up to 11 June 2028.
Ramachandran is a veteran banker with over three decades of extensive experience across various domains of banking. He began his career as an officer and steadily rose through the ranks to become a Whole-Time Director.
He served as Executive Director at both Allahabad Bank and Indian Bank. In addition, he held directorial positions at Indbank Merchant Banking Services and Indbank Housing Finance. He was also nominated by Allahabad Bank to serve as a Nominee Director at Universal Sompo General Insurance Ltd.
During his tenure as Executive Director, he led several strategic initiatives, including total branch automation, the implementation of core banking with electronic delivery channels, and centralisation of key banking operations such as retail loan processing, centralised KYC, and centralised account opening — efforts aimed at ensuring uniformity and improved operational control.
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Time of India
3 hours ago
- Time of India
SC says Hyatt's India operations are taxable under PE norms
In a ruling that has significant implications for multinational companies operating in India, the Supreme Court Thursday held that UAE-headquartered Hyatt International Southwest Asia , which provides hotel consultancy and advisory services in India as part of its business operations, has a fixed place Permanent Establishment (PE) in India for tax purposes. Upholding a Delhi High Court order that ruled against the hotel company, a bench comprising Justices J.B. Pardiwala and R. Mahadevan dismissed various the appeals by Hyatt International Southwest Asia Ltd, while affirming the findings of the HC that Hyatt had a fixed place PE in India within the meaning of Article 5(1) of the DTAA, and that, the income received under the strategic oversight services agreements (SOSA) is attributable to such PE and is, therefore, taxable in India. Explore courses from Top Institutes in Please select course: Select a Course Category Public Policy Leadership PGDM Finance Design Thinking Cybersecurity CXO Technology Digital Marketing Data Science Artificial Intelligence Healthcare MBA Project Management Operations Management Data Science Degree Management Others others healthcare Product Management MCA Skills you'll gain: Duration: 12 Months IIM Calcutta Executive Programme in Public Policy and Management Starts on undefined Get Details Skills you'll gain: Economics for Public Policy Making Quantitative Techniques Public & Project Finance Law, Health & Urban Development Policy Duration: 12 Months IIM Kozhikode Professional Certificate Programme in Public Policy Management Starts on Mar 3, 2024 Get Details The top court said that was undisputed that Hyatt's executives and employees paid frequent and regular visits to India to oversee operations and implement SOSA. 'The finding of the assessing officer, based on travel logs and job functions, establish continuous and coordinated engagement, even though no single individual exceeded the 9-month stay threshold,' according to SC Under Article 5(2)(i) of the agreement between the government of India and the United Arab Emirates for avoidance of double taxation (DTAA) Under Article 5(2)(i) of the DTAA, the relevant consideration is the continuity of business presence in aggregate – not the length of stay of each individual employee. Once it is found that there is continuity in the business operations, the intermittent presence or return of a particular employee becomes immaterial and insignificant in determining the existence of a PE, Justice Mahadevan, writing for the bench stated, adding the HC was correct in concluding that Hyatt's role was not confined to high-level decision making, but extended to substantial operational control and implementation. The Dubai-based company's ability to enforce compliance, oversee operations, and derive profit-linked fee from the hotel's earnings, demonstrate a clear and continuous commercial nexus, and control with the hotel's core functions, the judgment said, adding that this nexus satisfied the condition necessary for the constitution of a fixed place of PE under Article 5(1) of the India – UAE DTAA. The top court further said that 'the extent of control, strategic decision-making, and influence exercised by the appellant clearly establish that business was carried on through the hotel premises, satisfying the conditions under Article 5(1)…the hotel itself was the situs of the appellant's primary business operations, carried out under its direct supervision and aligned with its commercial interests.' Welcoming the ruling, Amit Baid of BTG Advaya said that "the judgment provides a clear conceptual framework for determining PE thresholds—frequent, regular visits by employees, rather than the duration of individual stays, is the key factor; once continuity of business presence is established, the return or rotation of individuals becomes irrelevant; and operational control, oversight, and income linked to core functions establish a commercial nexus necessary for a PE. The ruling could set a precedent for PE determinations in cases involving frequent employee travel to India." The judgement establishes that substantive operational involvement, such as orchestrating policies, directly overseeing operations, and controlling implementation, will be closely scrutinised when determining the existence of a fixed place PE in India, said Varun Gakhar, Research Associate at Janssen-Sanghavi & Associates. 'In essence, oversight that crosses into operational control may trigger domestic tax exposure under Indian tax treaties. This judgement will have to be analysed closely by multinationals, as determining whether a PE exists is a very fact- and circumstance-specific question,' he added. In 2008, Hyatt had entered into two strategic oversight services agreements with Asian Hotels Ltd. One was in respect of hotel Hyatt Regency, Delhi owned by Asian Hotels, and the other pertained to a hotel in Mumbai. Under the terms of the agreement, Hyatt agreed to provide strategic planning services and "know-how" to ensure that Hyatt Regency was developed and operated as an efficient and a high quality international full-service hotel. Asian Hotels was thereafter reorganised and its name was subsequently changed to Asian Hotels (North) Ltd., which continued to own Hyatt Regency. For the Assessment Year 2009-10, Hyatt filed its return of income declaring 'Nil' income and claiming a refund of around Rs 88 lakh. The Assessing Officer had passed assessment orders for 2009-18, holding that Hyatt's activities constituted a business connection under Section 9(1)(i) of the Income Tax Act; a PE under Article 5 of the DTAA; royalties and fees for technical services under both the Income Tax Act and DTAA. However, Hyatt asserted that its income was not taxable under the Act as there was no specific Article under the DTAA for taxing Fees for Technical Services. It further stated that it did not have any fixed place of business, office, or branch in India, and that the presence of its employees in India during the relevant previous year did not exceed the nine-month threshold under Article 5(2) of the DTAA. Therefore, the appellant claimed that it did not have a PE in India and that its business income was not taxable under Article 7 of the DTAA. The Income Tax Appellate Tribunal (ITAT) in December 2019 and then the HC rejected Hyatt's contention that it did not have a PE in India.
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Business Standard
3 hours ago
- Business Standard
SC dismisses Hyatt International Southwest Asia's appeal in tax case
The Supreme Court on Thursday held that UAE-headquartered Hyatt International Southwest Asia, which provides hotel advisory services in India as part of its business operations, will be considered a Permanent Establishment (PE) in India for tax purposes. A bench of Justices JB Pardiwala and R Mahadevan upheld the Delhi High Court's decision, ruling that Hyatt's Indian PE must be treated as a distinct taxable entity. 'We affirm the findings of the High Court that the appellant has a fixed place PE in India within the meaning of Article 5(1) of the Double Taxation Avoidance Agreement (DTAA), and that the income received under the SOSA (Strategic Oversight Services Agreement) is attributable to such PE and is therefore taxable in India,' the order said. The principal issue for the court to decide was whether Hyatt International Southwest Asia, a tax resident of the UAE, has a Permanent Establishment (PE) in India under Article 5(1) of the Indo–UAE DTAA, and consequently, whether its income derived under the SOSA is taxable in India. Hyatt International Southwest Asia (HISA) is a company incorporated under the Companies Law, Dubai International Financial Centre Law No 3 of 2006, in the United Arab Emirates. It is a tax resident of the UAE under Article 4 of the Agreement between the Government of India and the UAE for the avoidance of Double Taxation. The court also observed that under DTAAs, "the taxing rights of the source State over the business profits of a foreign enterprise are contingent upon the existence of a Permanent Establishment in the source country." The court said that HISA's submission that the daily operations were handled by Hyatt India, a separate legal entity, does not decisively support its case. 'It is well established that legal form does not override economic substance in determining PE status. The extent of control, strategic decision-making, and influence exercised by the appellant (HISA) clearly establishes that business was carried on through the hotel premises…' the judgment said. The court also held that a PE should be treated as a separate taxable entity, meaning India can tax profits attributable to the PE even if the foreign parent company incurs overall global losses. Foreign companies operating through Indian affiliates may now face possible taxation unless these strategic elements are addressed adequately, said Pallav Pradyumn Narang, Partner at law firm CNK. 'The judgment further states that global losses cannot shield India-sourced profits from taxation, and foreign firms with Permanent Establishments in India must now clearly attribute Indian income to such PEs. The court has flagged a conflict with its earlier ruling in the case of Nokia and has referred this matter to a larger bench, signalling that past precedents on PE may soon be overturned,' he said. Rahul Sateeja, Partner at law firm DMD Advocates, said the Hyatt International judgment by the Supreme Court will have a chilling effect across industries where standardisation of services through oversight by foreign executives is inevitable. 'The Indian counterparts of foreign companies need to review their transactions and calibrate them at arm's length price to avoid taxability based on another apex court judgment in MasterCard, even if Hyatt International is pressed to hold the existence of a permanent establishment (PE),' he said. Meanwhile, Ankit Jain, Partner at law firm Ved Jain and Associates, said that one way for international hotel chains to mitigate this tax exposure is by setting up a dedicated entity in India to manage their local hotel operations. 'By doing so, the management and brand services can be routed through an Indian company, reducing the risk of triggering a PE and the resulting tax disputes. This structure also provides greater clarity and compliance for tax authorities and offers long-term stability for both the hotel chain and property owners operating under the brand,' he said.
Time of India
5 hours ago
- Time of India
Indian Bank Q1 Result: PAT jumps 24% to Rs 2,973 crore on lower NPA provisions
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