Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding

🚨 Important Update for Our Users

We are transitioning to our new and improved portal - www.taxtmi.com - for a better experience.

⚠️ This portal will be discontinued soon

  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Income Tax Income Tax + AAR Income Tax - 2008 (11) TMI AAR This

  • Login
  • Cases Cited
  • Referred In
  • Summary

Forgot password



 

2008 (11) TMI 9 - AAR - Income Tax


  1. 2024 (11) TMI 1385 - HC
  2. 2014 (9) TMI 706 - HC
  3. 2014 (5) TMI 154 - HC
  4. 2025 (4) TMI 1131 - AT
  5. 2025 (1) TMI 449 - AT
  6. 2025 (1) TMI 174 - AT
  7. 2024 (8) TMI 426 - AT
  8. 2024 (7) TMI 134 - AT
  9. 2024 (3) TMI 1066 - AT
  10. 2023 (10) TMI 1015 - AT
  11. 2023 (10) TMI 458 - AT
  12. 2023 (5) TMI 1221 - AT
  13. 2023 (4) TMI 1260 - AT
  14. 2023 (3) TMI 1485 - AT
  15. 2022 (12) TMI 1402 - AT
  16. 2023 (2) TMI 247 - AT
  17. 2022 (10) TMI 1104 - AT
  18. 2022 (9) TMI 1538 - AT
  19. 2022 (9) TMI 469 - AT
  20. 2022 (8) TMI 1297 - AT
  21. 2022 (7) TMI 1330 - AT
  22. 2022 (5) TMI 1603 - AT
  23. 2022 (5) TMI 770 - AT
  24. 2022 (5) TMI 1002 - AT
  25. 2022 (5) TMI 673 - AT
  26. 2022 (4) TMI 1279 - AT
  27. 2022 (3) TMI 140 - AT
  28. 2021 (11) TMI 1033 - AT
  29. 2021 (12) TMI 585 - AT
  30. 2021 (10) TMI 443 - AT
  31. 2021 (1) TMI 1080 - AT
  32. 2020 (11) TMI 901 - AT
  33. 2021 (1) TMI 76 - AT
  34. 2020 (7) TMI 644 - AT
  35. 2020 (5) TMI 704 - AT
  36. 2019 (10) TMI 990 - AT
  37. 2019 (10) TMI 1127 - AT
  38. 2019 (8) TMI 1264 - AT
  39. 2019 (8) TMI 1797 - AT
  40. 2019 (7) TMI 1719 - AT
  41. 2019 (5) TMI 1602 - AT
  42. 2019 (5) TMI 1535 - AT
  43. 2019 (4) TMI 605 - AT
  44. 2019 (3) TMI 458 - AT
  45. 2019 (1) TMI 692 - AT
  46. 2019 (3) TMI 202 - AT
  47. 2018 (7) TMI 208 - AT
  48. 2018 (3) TMI 1956 - AT
  49. 2018 (1) TMI 1537 - AT
  50. 2017 (2) TMI 634 - AT
  51. 2017 (2) TMI 779 - AT
  52. 2016 (11) TMI 666 - AT
  53. 2016 (12) TMI 943 - AT
  54. 2016 (10) TMI 7 - AT
  55. 2016 (7) TMI 562 - AT
  56. 2016 (4) TMI 413 - AT
  57. 2016 (2) TMI 667 - AT
  58. 2015 (7) TMI 1440 - AT
  59. 2015 (7) TMI 948 - AT
  60. 2015 (7) TMI 476 - AT
  61. 2015 (5) TMI 609 - AT
  62. 2015 (9) TMI 375 - AT
  63. 2014 (12) TMI 388 - AT
  64. 2014 (9) TMI 352 - AT
  65. 2014 (2) TMI 312 - AT
  66. 2014 (1) TMI 1363 - AT
  67. 2014 (9) TMI 256 - AT
  68. 2013 (11) TMI 317 - AT
  69. 2013 (8) TMI 446 - AT
  70. 2013 (4) TMI 995 - AT
  71. 2013 (12) TMI 301 - AT
  72. 2013 (1) TMI 421 - AT
  73. 2012 (7) TMI 702 - AT
  74. 2012 (10) TMI 473 - AT
  75. 2012 (10) TMI 472 - AT
  76. 2012 (7) TMI 656 - AT
  77. 2012 (10) TMI 237 - AT
  78. 2012 (6) TMI 483 - AT
  79. 2012 (7) TMI 120 - AT
  80. 2012 (4) TMI 271 - AT
  81. 2012 (4) TMI 209 - AT
  82. 2011 (9) TMI 807 - AT
  83. 2011 (9) TMI 754 - AT
  84. 2011 (7) TMI 1108 - AT
  85. 2011 (4) TMI 548 - AT
  86. 2011 (1) TMI 911 - AT
  87. 2010 (10) TMI 597 - AT
  88. 2010 (7) TMI 1081 - AT
  89. 2009 (8) TMI 853 - AT
  90. 2009 (8) TMI 973 - AT
  91. 2009 (7) TMI 171 - AT
  92. 2009 (4) TMI 207 - AT
  93. 2021 (3) TMI 21 - AAR
  94. 2019 (7) TMI 1750 - AAR
  95. 2019 (6) TMI 1623 - AAR
  96. 2018 (6) TMI 37 - AAR
  97. 2018 (1) TMI 944 - AAR
  98. 2016 (9) TMI 349 - AAR
  99. 2016 (1) TMI 792 - AAR
  100. 2015 (8) TMI 136 - AAR
  101. 2014 (4) TMI 249 - AAR
  102. 2012 (2) TMI 98 - AAR
  103. 2011 (12) TMI 17 - AAR
  104. 2011 (5) TMI 351 - AAR
  105. 2010 (8) TMI 9 - AAR
  106. 2010 (8) TMI 8 - AAR
  107. 2010 (3) TMI 108 - AAR
  108. 2010 (3) TMI 115 - AAR
  109. 2009 (8) TMI 6 - AAR
  110. 2009 (4) TMI 16 - AAR
Issues Involved:
1. Taxability of service fees as "Royalties & Fee for Technical Services" under Article 13 of DTAA between India & UK.
2. Requirement to deduct tax at source on service fees under Section 115A(1)(b)(BB) of the Income-tax Act, 1961.

Issue-wise Detailed Analysis:

1. Taxability of Service Fees as "Royalties & Fee for Technical Services" under Article 13 of DTAA between India & UK:

The applicant, a private limited company in India and a subsidiary of Intertek Holding U.K. Limited, sought an advance ruling on whether the service fee paid to Intertek Testing Management Limited (ITM), UK under the Global Management Services Agreement (GMSA) is taxable as "Royalties & Fee for Technical Services" under Article 13 of the Double Taxation Avoidance Agreement (DTAA) between India and the United Kingdom.

The applicant contended that the payments made to ITM for various services do not fall under "fee for technical services" as defined in the DTAA and, therefore, no income-tax can be charged in India. The applicant further clarified that the application relates only to the service fee paid under GMSA for Corporate Head Office Services and Divisional Global Services in the fields of executive, commercial, financial, marketing, and administrative management systems and techniques.

The Authority examined the definition of "fee for technical services" under Article 13.4(c) of the DTAA, which requires that the services rendered should "make available" technical knowledge, experience, skill, know-how, etc., to the recipient. This means that the recipient should be able to use the technical knowledge or skills independently in the future without the aid of the service provider.

The Authority noted that the applicant did not provide specific details of the services rendered by ITM, UK, and only gave a general account of the services that might be received. On a broad analysis, the Authority found that many of the services catalogued in the Agreement and the Note are in the nature of technical or consultancy services but do not "make available" technical knowledge, experience, skill, know-how, etc., to the applicant. However, some services, such as training staff on the use of accounting software, feedback for improving accounting skills, advice on tax planning, developing IT-related systems design, and provision of accounting policies manual, do satisfy the test of "making available" technical knowledge and are taxable as FTS under Article 13.4 of the Treaty.

The Authority also noted that some services could be classified as managerial, and certain services did not fall under either technical, consultancy, or managerial categories. Therefore, it was concluded that many of the services do not fall within the ambit of clause (c) of Article 13.4, but some do, and thus, the service fee is partially taxable under the Treaty.

2. Requirement to Deduct Tax at Source on Service Fees under Section 115A(1)(b)(BB) of the Income-tax Act, 1961:

Given the mixed nature of services, the Authority held that it is not possible to determine definitively that all the services rendered do not fall under FTS and that the entirety of the service fee charged does not constitute income under the Treaty. The Authority laid down the principle and indicated broadly whether the listed services attract the provision of Article 13.4(c) of the Treaty.

The Authority suggested that the applicant should approach the competent authority to determine the issue of tax deduction at source by filing an application under Section 195 of the Income-tax Act. Any order passed under Section 195 is tentative and does not adversely affect the rights of the payee or recipient. The appropriate authority will determine the extent and rate of tax deduction in light of the principles laid down and observations made in the ruling.

Conclusion:

The ruling concluded that many services under the GMSA do not make available technical knowledge and are not taxable as FTS under the DTAA, while some services do and are taxable. The applicant should seek a determination from the competent authority regarding the tax deduction at source. The Authority's ruling provided guidance on the classification of services and the interpretation of "make available" under the Treaty.

 

 

 

 

Quick Updates:Latest Updates