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TMI BlogInterpreting "Technical Services" under Tax Treaties: A Comprehensive AnalysisX X X X Extracts X X X X X X X X Extracts X X X X ..... are and related services. Arguments Presented Assessee's Arguments SFDC Ireland contended that the payments received from its Indian subsidiary, SFDC India, were not in the nature of "fees for technical services" under Article 12(3)(b) of the India-Ireland DTAA. The company argued that it was merely selling standard, off-the-shelf, non-customized software products to SFDC India, which acted as a reseller in the Indian territory. The technical assistance and training provided to SFDC India were incidental to the sale of the software products and did not constitute the rendering of technical services. Revenue's Arguments The Income Tax Department argued that SFDC Ireland was providing comprehensive services and solution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s within the territory for the use of SFDC products. The technical assistance and training provided by SFDC Ireland were aimed at enabling SFDC India's staff to understand the attributes and capabilities of SFDC products for marketing purposes. The court held that such training and assistance did not constitute the conferral of specialized or exclusive technical services. Customization and Individualization The court observed that the respondent (Income Tax Department) failed to establish that SFDC Ireland was providing customized or specially designed software solutions to its customers. The impugned order did not advert to any material indicating that the supply of SFDC products departed from a standard scope of services. The cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned by the respondents. Decision The court allowed the writ petition and quashed the order dated 16 October 2023 and the certification dated 18 October 2023. The matter was remitted to the respondent for considering SFDC Ireland's application afresh, bearing in mind the court's observations, particularly those highlighted in paragraphs 48 and 49 of the judgement. Doctrine or Legal Principle Discussed The key legal principle discussed in the judgement is the interpretation of the term "technical services" under the India-Ireland DTAA. The court relied on the Supreme Court's decision in CIT v. Kotak Securities Ltd. and the guidance provided by the United Nations Handbook on Selected Issues in Administration of Double ..... X X X X Extracts X X X X X X X X Extracts X X X X
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