Western Union exempted from income tax

In a major relief to international money transfer giant Western Union, the Income Tax Appellate Tribunal (ITAT) has exempted it from paying income tax in India overturning an order of the Commissioner of Income-Tax (Appeals).

Western Union, a US-registered company, is engaged in the business of money transfer to India by appointing the Department of Post and Telegraph, banks, financial institutions and travel agents as its agents in India.

Dinesh Vyas, the company's counsel, had argued that since its office in India was not undertaking any commercial activity and its agents were just assisting in money transfer it was not liable to be taxed here. The company also claimed that its operations were exempt under the double taxation avoidance treaty between India and the US.