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2012 (3) TMI 242 - AAR - Income TaxFTS - IVTC services - Whether payment received by the applicant in connection with transactions undertaken in relation to the Inspection, Verification, Testing and Certification (IVTC) services are chargeable to tax in India as “FTS” u/s 9(1)(vii)(b) - applicant being tax resident of Hong Kong belonging to X group of companies engaged in the business of IVTC services – services to Indian customers provided through X India - Held that:- It is observed that reports are highly technical in nature and are cargo activity specific. These are admittedly customized services and not routine commercial services. Thus, the technical services provided to the customers/X India is covered under the term “fee for technical services” u/s 9(1)(vii). The exception provided u/s 9(1)(vii)(b) of the Act is not available to the applicant. Whether payments received in connection with costs incurred for and on behalf of X India / recovery of administrative cost are chargeable to tax in India – Held that:- Such payments are also chargeable to tax as FTS u/s 9(1)(vii). Withholding of tax – Held that:- As the applicant has tax presence in India, X India / Indian customers are required to withhold taxes u/s 195 at the rate in force mentioned in the Finance Act for the relevant year. Requirement of filing of return u/s 139 – Held that:- As the applicant has taxable income in India, it is required to file tax return under the provision of section 139.
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