Supreme Court Issues Notice On Revenue's Appeal Against HC's India-Singapore DTAA Relief To ST Shipping

The Supreme Court on Wednesday issued notice in the Income Tax Department's appeal challenging a Gujarat High Court judgment that held ST Shipping Pte Ltd, Singapore was entitled to the benefit of Article 8 of the India-Singapore Double Taxation Avoidance Agreement (DTAA).

Under Article 8 of the DTAA, profits from the operation of ships in international traffic are taxable only in the country of residence.

A bench of Justices P.S. Narasimha and Alok Aradhe while issuing notice on the Revenue's appeal said that it would assign a date for hearing the matter.

The dispute arose after the Income Tax Department denied ST Shipping Pte Ltd, Singapore the benefit of Article 8 of the India Singapore DTAA. The Assessing Officer held that since the freight income was remitted to a bank account in London instead of Singapore, the exemption was unavailable under Article 24 (Limitation of Relief).

The CIT(A) upheld the assessment while the ITAT, Rajkot, remanded the matter to the Assessing Officer to verify the certificate issued by the Inland Revenue Authority of Singapore (IRAS), observing that if the Revenue failed to rebut the certificate, relief should be granted in line with the Gujarat High Court's earlier ruling in M.T. Maersk Mikage.

On October 15, 2025, the Gujarat High Court set aside the ITAT's remand order. It held that the Tribunal could not reopen an issue already settled in M.T. Maersk Mikage, where the Court had ruled that Article 24 would not apply if the income was taxable in Singapore on an accrual basis rather than a remittance basis.

Finding no material produced by the Revenue to discredit the IRAS certificate, the High Court held that the assessee was entitled to the benefit of Article 8 of the DTAA.