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“fees for technical services”

International TaxSection 9(1)(vii)Section 9(1)(vii)1,408 judgments

The decision most relied on for fees for technical services is Engineering Analysis Centre of Excellence (P) Ltd. v. CIT (432 ITR 471), cited in 914 judgments on BharatTax.

Leading authorities on fees for technical services

Engineering Analysis Centre of Excellence (P) Ltd. v. CIT
432 ITR 471 · 2021 · Supreme Court
914
citing judgments

Payments for the supply or use of computer software, where there is no transfer of copyright but only a right to use the copyrighted product, are generally considered business profits and not 'royalty' or 'fees for technical services' under the Income Tax Act, 1961 or relevant DTAAs. This principle also applies to transponder fees, which are not taxable as royalty.

CIT v. De Beers India Minerals (P.) Ltd.
346 ITR 467 · 2012 · High Court
371
citing judgments

For fees for technical or consultancy services to 'make available' technical knowledge or know-how under a DTAA, the service must transmit such knowledge, allowing the recipient to derive an enduring benefit and utilize it independently in the future.

DIT v. Nokia Networks OY
358 ITR 259 · 2013 · High Court
276
citing judgments

Payments for the supply of software along with telecom equipment are not in the nature of royalty if they are for the use of a copyrighted article, not the copyright itself. Such payments are not taxable in India in the absence of a Permanent Establishment (PE).

DIT v. Infrasoft Ltd.
39 Taxmann.com 88 · 2013 · High Court
269
citing judgments

Payments for the use of copyrighted software, without the transfer of any rights in the underlying copyright itself, do not constitute 'royalty' under the Income-tax Act or tax treaties. Such payments are often treated as business income, taxable only if a permanent establishment exists.

CIT v. Siemens Aktiongesellschaft
310 ITR 320 · 2009 · High Court
259
citing judgments

Reimbursements of actual expenses without any profit element are not taxable income. Additionally, mere amendments to the Income-tax Act do not override the provisions of Double Taxation Avoidance Agreements (DTAAs).

Skycell Communications Ltd. v. DCIT
251 ITR 53 · 2001 · High Court
253
citing judgments

Technical services involve human intervention and expertise, not just routine or machine-based operations. Routine customer support and standard facility provision through technology do not constitute technical services under the Act.

Transmission Corporation of Andhra Pradesh v. CIT
239 ITR 587 · 1999 · Supreme Court
243
citing judgments

The Supreme Court lays down principles for deducting tax at source (TDS) under Section 195 on payments to non-residents, including aspects of income deemed taxable in India and the application of Double Taxation Avoidance Agreements (DTAAs) under Section 90.

ONGC v. CIT
376 ITR 306 · 2015 · Supreme Court
241
citing judgments

Income derived by a non-resident for services related to mineral oil operations, falling under the presumptive taxation regime of Section 44BB, cannot simultaneously be treated as fees for technical services under Section 9(1)(vii). The specific presumptive provisions override the general FTS definition, particularly when DTAA applies.

Judgments citing fees for technical services

ACIT, International Taxation, Circle-1(1)(1), New Delhi vs. Avnet Technologies Hong Kong Ltd, Hong Kong

In the result, the appeal is dismissed

ITA 1283/DEL/2022[2017-18]Status: DisposedITAT Delhi16 Oct 2023AY 2017-18

Bench: Shri Saktijit Dey, Vice- & Dr. B.R.R. Kumarassessment Year: 2017-18

For Appellant: Shri Tapas Misra, AdvFor Respondent: Shri Sanjay Kumar, Sr. DR
Section 115ASection 9(1)(vii)

General Operational 2 ITA No. 1283/Del/2022 ACIT vs. Avnet Technologies Hong Kong Ltd., Hong Kong - AY: 2017-18 and administrative services as Fees for Technical Services u/s. 9(1)(vii) of the Income-Tax Act, 1961. 3. Briefly, the facts relating to the issue are, the assessee, a non- resident ... Hong Kong - AY: 2017-18 that the services rendered are neither managerial nor technical, hence, the receipts there-from cannot be treated as Fee for Technical Services (FTS). It was submitted that the assessee is rendering support services for providing strategic direction in certain aspects of the business only

Legrand Nederland B.V., Mumbai vs. Asstt. Comm. of Income Tax 3(1)(2), Mumbai

In the result, appeal filed by the assessee is partly allowed

ITA 2487/MUM/2022[2017-18]Status: DisposedITAT Mumbai13 Oct 2023AY 2017-18

Bench: Shri Aby T. Varkey, Hon'Ble & Shri S. Rifaur Rahman, Hon'Blelegrand Nederland B.V. V. Acit (Intl. Taxation) – 3(1)(2) 16Th Floor, Air India Building 61/62, 6Th Floor Nariman Point, Mumbai Kalpatru Square, Kondivita Road Off. Andheri Road, Andheri (E) Mumbai - 400059 Pan: Aaccl1156B (Appellant) (Respondent) Assessee Represented By : Shri P.J. Pardiwala & Shri Prayas Jain Department Represented By : Shri Amit Kumar Soni

Section 10(34)Section 112(1)(c)Section 115Section 144C(5)Section 2(22)(d)Section 244ASection 270A

India and a third State which is a member of the OECD India should limit its taxation at source on dividends, interests, royalties, fees for technical services or payments for the use of equipment to a rate lower or a scope more restricted than the rate or scope provided ... India and a third State which is a member of the OECD India should limit its taxation at source on dividends, interests, royalties, fees for technical services or payments for the use of equipment to a rate lower or a scope more restricted than the rate or scope provided

ACIT, Central Circle-2, Udaipur vs. M/S Mewar Hospital Pvt. Ltd., Udaipur

In the result the appeal of the assessee in ITA No

ITA 169/JODH/2022[2018-19]Status: DisposedITAT Jodhpur12 Oct 2023AY 2018-19
Section 143(3)Section 145Section 153A

gains of business or profession" (a) in the case of any assessee-A) any interest, commission or brokerage, fees for professional series or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply

ACIT, Central Circle-2, Udaipur vs. M/S Mewar Hospital Pvt. Ltd., Udaipur

In the result the appeal of the assessee in ITA No

ITA 168/JODH/2022[2017-18]Status: DisposedITAT Jodhpur12 Oct 2023AY 2017-18
Section 143(3)Section 145Section 153A

gains of business or profession" (a) in the case of any assessee-A) any interest, commission or brokerage, fees for professional series or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply

ACIT, Central Circle-2, Udaipur vs. M/S Mewar Hospital Pvt. Ltd., Udaipur

In the result the appeal of the assessee in ITA No

ITA 167/JODH/2022[2016-17]Status: DisposedITAT Jodhpur12 Oct 2023AY 2016-17
Section 143(3)Section 145Section 153A

gains of business or profession" (a) in the case of any assessee-A) any interest, commission or brokerage, fees for professional series or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply

Mewar Hospital Pvt. Ltd., Udaipur vs. ACIT, Central Circle-2, Udaipur

In the result the appeal of the assessee in ITA No

ITA 144/JODH/2022[2018-19]Status: DisposedITAT Jodhpur12 Oct 2023AY 2018-19
Section 143(3)Section 145Section 153A

gains of business or profession" (a) in the case of any assessee-A) any interest, commission or brokerage, fees for professional series or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply

Mewar Hospital Pvt. Ltd., Udaipur vs. ACIT, Central Circle-2, Udaipur

In the result the appeal of the assessee in ITA No

ITA 143/JODH/2022[2017-18]Status: DisposedITAT Jodhpur12 Oct 2023AY 2017-18
Section 143(3)Section 145Section 153A

gains of business or profession" (a) in the case of any assessee-A) any interest, commission or brokerage, fees for professional series or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply

Mewar Hospital Pvt. Ltd., Udaipur vs. ACIT, Central Circle-2, Udaipur

In the result the appeal of the assessee in ITA No

ITA 142/JODH/2022[2016-17]Status: DisposedITAT Jodhpur12 Oct 2023AY 2016-17
Section 143(3)Section 145Section 153A

gains of business or profession" (a) in the case of any assessee-A) any interest, commission or brokerage, fees for professional series or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply

Mewar Hospital Pvt. Ltd., Udaipur vs. ACIT, Central Circle-2, Udaipur

In the result the appeal of the assessee in ITA No

ITA 141/JODH/2022[2015-16]Status: DisposedITAT Jodhpur12 Oct 2023AY 2015-16
Section 143(3)Section 145Section 153A

gains of business or profession" (a) in the case of any assessee-A) any interest, commission or brokerage, fees for professional series or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply

Mewar Hospital Pvt. Ltd., Udaipur vs. ACIT, Central Circle-2, Udaipur

In the result the appeal of the assessee in ITA No

ITA 140/JODH/2022[2014-15]Status: DisposedITAT Jodhpur12 Oct 2023AY 2014-15
Section 143(3)Section 145Section 153A

gains of business or profession" (a) in the case of any assessee-A) any interest, commission or brokerage, fees for professional series or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply

Mewar Hospital Pvt. Ltd., Udaipur vs. ACIT, Central Circle-2, Udaipur

In the result the appeal of the assessee in ITA No

ITA 139/JODH/2022[2012-13]Status: DisposedITAT Jodhpur12 Oct 2023AY 2012-13
Section 143(3)Section 145Section 153A

gains of business or profession" (a) in the case of any assessee-A) any interest, commission or brokerage, fees for professional series or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply

Sunbeam Lightweighting Solutions Pvt Ltd (Formely Sunbeam Auto Pvt Ltd), Gurgaon vs. DCIT Circle-24(2), New Delhi

ITA 117/DEL/2020[2015-16]Status: DisposedITAT Delhi11 Oct 2023AY 2015-16

Bench: Sh. M. Balaganesh & Sh.Anubhav Sharma

Section 143(3)Section 195Section 234Section 234ASection 40Section 9Section 9(1)(vii)Section 9(2)

Thus, soliciting of business is only a part of it. As the aforesaid would fall within the purview of section 9(l)(vii). “fee for technical services which would be liable to be taxable in India as income deemed to have accrued/arisen in India. Accordingly Ld. AO had made ... agreements and rejecting the explanation of the assessee held that the services provided by the said parties fall within the purview of Fees for Technical Services (“FTS”) as per section 9(1)(vii) of the Act and Fees for Included Services (“FIS”) as per Article 12(4) of India

Sunbeam Lightweighting Solutions Pvt Ltd (Formely Sunbeam Auto Pvt Ltd), Gurgaon vs. DCIT Circle-24(2), New Delhi

ITA 116/DEL/2020[2014-15]Status: DisposedITAT Delhi11 Oct 2023AY 2014-15

Bench: Sh. M. Balaganesh & Sh.Anubhav Sharma

Section 143(3)Section 195Section 234Section 234ASection 40Section 9Section 9(1)(vii)Section 9(2)

Thus, soliciting of business is only a part of it. As the aforesaid would fall within the purview of section 9(l)(vii). “fee for technical services which would be liable to be taxable in India as income deemed to have accrued/arisen in India. Accordingly Ld. AO had made ... agreements and rejecting the explanation of the assessee held that the services provided by the said parties fall within the purview of Fees for Technical Services (“FTS”) as per section 9(1)(vii) of the Act and Fees for Included Services (“FIS”) as per Article 12(4) of India

Gurner India Private Ltd., Delhi vs. Circle 10(2), Delhi

The appeal of the assessee is hereby allowed

ITA 796/DEL/2022[2017-18]Status: DisposedITAT Delhi10 Oct 2023AY 2017-18

Bench: Sh. Shamim Yahya & Sh. Anubhav Sharmaita No. 796/Del/2022, A.Y. 2017-18 M/S. Gurner India Pvt. Ltd. Vs. National Faceless Assessmetn 714, International Trade Centre, Tower, Nehru Place, New Delhi Delhi-110019 Pan : Aadcg2938H (Appellant) (Respondent)

Section 143(3)Section 144BSection 144CSection 92C

Goods 6,64,97,974 TNMM 3 Purchase of Plant & 58,78,746 Machinery TNMM 4 Royalties 5,37,08,967 TNMM 5 Fees for technical Services 6,90,94,370 (Paid) TNMM 6 Reimbursement of travelling 13,78,661 expenses 2.2 DRP-1, New Delhi vide its order dated ... case considered royalty rate of 3% to be arms length rate for bench marking the transaction of payment of royalty while for fee for technical services followed DRP directions for A.Y. 2012-13. 4. Accordingly, draft assessment order u/s 144C was served upon which assessee for which assessee raised objection

E Service Singapore Pte Ltd., Gurugram vs. DCIT (International Taxation), New Delhi

In the result, the appeals of the assessee in :

ITA 573/DEL/2017[2013-14]Status: DisposedITAT Delhi10 Oct 2023AY 2013-14

Bench: Shri Saktijit Dey & Shri N.K. Billaiya

For Appellant: Shri Satyen Sethi, AdvFor Respondent: Shri Vizay B. Vasanta, CIT- DR
Section 143(3)Section 9(1)(vi)

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘D’ BENCH, NEW DELHI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT, AND SHRI N.K

E Service Singapore Pte Ltd., Gurugram vs. DCIT (International Taxation), New Delhi

In the result, the appeals of the assessee in :

ITA 572/DEL/2017[2012-13]Status: DisposedITAT Delhi10 Oct 2023AY 2012-13

Bench: Shri Saktijit Dey & Shri N.K. Billaiya

For Appellant: Shri Satyen Sethi, AdvFor Respondent: Shri Vizay B. Vasanta, CIT- DR
Section 143(3)Section 9(1)(vi)

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘D’ BENCH, NEW DELHI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT, AND SHRI N.K

Hp Services (Singapore) Pte Ltd., Gurgaon vs. DCIT (International Taxation), New Delhi

In the result, the appeals of the assessee in :

ITA 2142/DEL/2016[2011-12]Status: DisposedITAT Delhi10 Oct 2023AY 2011-12

Bench: Shri Saktijit Dey & Shri N.K. Billaiya

For Appellant: Shri Satyen Sethi, AdvFor Respondent: Shri Vizay B. Vasanta, CIT- DR
Section 143(3)Section 9(1)(vi)

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘D’ BENCH, NEW DELHI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT, AND SHRI N.K

Gunnebo, Mumbai vs. ACIT (International Taxation), Circle-2 (3)(2), Mumbai

In the result, the appeal of the assessee is allowed

ITA 1441/MUM/2021[2016-17]Status: DisposedITAT Mumbai04 Oct 2023AY 2016-17

Bench: Shri Aby T. Varkey, Jm & Shri S. Rifaur Rahman, Am आयकर अपील सं/ I.T.A. No. 1441/Mum/2021 (निर्धारण वर्ा / Assessment Year: 2016-17) Gunnebo Ab Acit (International बिधम/ Po Box No.5181, Goteberg, Taxation), Circle-2(3)(2) Vs. Sweden. Room No.2908, 29Th Floor, World Trade Centre-1, Cuffee Parade, Mumbai-400005. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaecg9613J (अपीलार्थी /Assessee) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Dhanesh Bafna/Pratik Shah/Riddhi Maru Revenue By: Shri Amit Kumar Soni (Sr. Dr) सुनवाई की तारीख / Date Of Hearing: 20/07/2023 घोषणा की तारीख /Date Of Pronouncement: 04/10/2023 आदेश / O R D E R

For Appellant: Shri Dhanesh Bafna/PratikFor Respondent: Shri Amit Kumar Soni (Sr. DR)
Section 139Section 14Section 143(3)Section 92C

taxed in India. In respect of Training, Telecom & Recruitment Charges, the Ld. AR submitted that these payments did not qualify as ‘fees for technical services’ [in short ‘FTS’] under the DTAA and was therefore not liable to be taxed in India. Inviting our attention to the Protocol to Article ... assessee to the agents. Once these are accepted, by no stretch of imagination, payments made by the agents can be treated as fee for technical service. It is in the nature of reimbursement of cost whereby the three agents paid their proportionate share of the expenses incurred on these said

Joint Commissioner of Income Tax (OSD) (It)-3(2)(1), Mumbai vs. M/S Mckinsey & Company Singapore Pte Limited, Mumbai

ITA 2123/MUM/2023[2012-13]Status: DisposedITAT Mumbai28 Sept 2023AY 2012-13

Bench: Shri Aby T. Varkey & Shri Gagan Goyal

For Appellant: Shri Anil Sant, Ld. DRFor Respondent: Shri Divesh Chawala, Ld. AR
Section 144CSection 250Section 92C

case and in law, the Ld. CIT(A) erred in concluding that borrowed services fees received by the assessees does not constitute Fee for Technical Services in the hands of the assessee and the same falls within the ambit of 'Business Profit' under Article 7 of the India-Singapore Double ... erred in holding the income as Business Profit without PE, whereas the nature of income is of 'Fees for Technical Services'? 3. The Appellant prays that the order of the Ld. CIT (A) on the above ground(s) be set aside and that of the Assessing Officer be restored

M/S. Buro Happold Ltd, Mumbai vs. Dy.CIT (Int Tax) -1(3) (2), Mumbai

In the result, appeal of the assessee is partly allowed

ITA 516/MUM/2022[2018-19]Status: DisposedITAT Mumbai27 Sept 2023AY 2018-19

Bench: Shri Vikas Awasthy& Ms. Padmavathy.Sआअसं.516/मुं/2022 (िन.व. 2018-19) Buro Happold Limited, C/O. Sudit K. Parekh & Co. Llp, Urmix Axis, 06Th Floor, Famous Studio Lane, Dr.E.Moses Road, Mahalaxmi, Mumbai 400 011. Pan: Aabcb-9239-Q ...... अपीलाथ"/Appellant बनाम Vs. Deputy Commissioner Of Income Tax International Taxation -1(3)(2),Mumbai 1810, 18Th Floor, Air India Building, Nariman Point, Mumbai 400 021. ..... "ितवादी/Respondent अपीलाथ" "ारा /Appellant By : Shri Vijay Mehta "ितवादी "ारा /Respondent By : Shri Anil Sant सुनवाई की ितिथ/ Date Of Hearing : 10/08/2023 घोषणा की ितिथ/ Date Of Pronouncement : 27/09/2023 आदेश/Order Per Vikas Awasthy, Jm:

For Appellant: Shri Vijay MehtaFor Respondent: Shri Anil Sant
Section 143(3)Section 234BSection 234C

appeal has assailed the assessment order on following grounds: 2 1. Ground No.1 – Taxability of amount received for Consulting and Engineering services as Fees for technical services (FTS) 1.1 On the facts and in the circumstances of the case and in law, the learned DRP ('Dispute Resolution Panel') and DCIT ... have erred in considering income from consulting and engineering services amounting to INR 21,25,145/- as Fees for technical services ('FTS'} as per Article 13 of India-UK Double Taxation Avoidance Agreement ('DTAA'). 2. Ground No. II -Taxability of amount received as common cost recharge as Royalty and Fees