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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

DDIT (I.T) 2(1), Mumbai vs. M/S. Reuters Ltd., Mumbai

Appeals are disposed off

ITA 5228/MUM/2004[2000-2001]Status: DisposedITAT Mumbai28 Jun 2023AY 2000-2001

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm Assessment Year 2000 – 01

For Appellant: Shri Niraj D Sheth, AdvocateFor Respondent: Shri Sunil Umap, DR

assessee and for the same year, the coordinate bench comes to conclusion that these revenues cannot be taxed in India as royalty or fees for technical services, it is not open to hold otherwise in case of recipient of the income. Therefore the decision of the learned ... years as before us, has held that the amounts received under the DA and the PDA cannot be taxed as royalty of as fees for technical services under the Indo UK tax treaty. While doing so, the coordinate bench has, inter alia, observed as follows: 39. With the above background

Refinitiv Ltd., Mumbai vs. DDIT (I.Taxation) Range 2, Mumbai

Appeals are disposed off

ITA 5092/MUM/2004[2000-01]Status: DisposedITAT Mumbai28 Jun 2023AY 2000-01

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm Assessment Year 2000 – 01

For Appellant: Shri Niraj D Sheth, AdvocateFor Respondent: Shri Sunil Umap, DR

assessee and for the same year, the coordinate bench comes to conclusion that these revenues cannot be taxed in India as royalty or fees for technical services, it is not open to hold otherwise in case of recipient of the income. Therefore the decision of the learned ... years as before us, has held that the amounts received under the DA and the PDA cannot be taxed as royalty of as fees for technical services under the Indo UK tax treaty. While doing so, the coordinate bench has, inter alia, observed as follows: 39. With the above background

Serco India Pvt. Ltd., Pune vs. DCIT, Gurgaon

In the result, appeal filed by the Assessee stands allowed

ITA 1432/DEL/2016[2011-12]Status: DisposedITAT Delhi27 Jun 2023AY 2011-12

Bench: Shrianil Chaturvedi, Am & Shri N. K. Choudhry, Jm

For Appellant: Sh. Suraj Bhan Nain, Ld. AdvFor Respondent: Sh. Rajesh Kumar, Ld. CIT (DR)
Section 143(3)Section 92C

High Court in the case of Centrica (supra) show-caused the Assessee, as to why reimbursement of salaries may not be treated as Fees for technical services (FTS). 15.4 In response the Assessee claimed as under: (i) The Assessee is legal and economical employer of these employees. (ii) The case ... dealt with the seconded employees and according to the judgement in that case, the case of the Assessee is also covered to be “Fees for Technical Services” provided. The Ld. DR before us also demonstrated the facts of Centrica (supra) and the Assessee‟s case, in order to show

Inter Continental Hotels Group (Asia Pacific) Pte Ltd., Singapore vs. DCIT, Circle- 2(1)(1), International Taxation, New Delhi

In the result, the appeals of the assessee in ITA Nos

ITA 646/DEL/2020[2016-17]Status: DisposedITAT Delhi23 Jun 2023AY 2016-17

Bench: Shri N.K. Billaiya & Shri Challa Nagendra Prasad

For Appellant: Shri S.K. Aggarwal, CAFor Respondent: Shri Vizay B. Vasanta, CIT- DR
Section 143(3)

from Inter Continental Hotels Group [Asia Pacific] India Pvt Ltd [IHGAP] towards provision of Management Support Services to be in the nature of Fees for Technical Services [FTS] under Article 12 of the India – Singapore DTAA. 4. At the very outset, the ld. counsel for the assessee stated that

Inter Continental Hotels Group (Asia Pacific) Pte Ltd., Singapore vs. DCIT, Circle- 2(1)(1), International Taxation, New Delhi

In the result, the appeals of the assessee in ITA Nos

ITA 645/DEL/2020[2015-16]Status: DisposedITAT Delhi23 Jun 2023AY 2015-16

Bench: Shri N.K. Billaiya & Shri Challa Nagendra Prasad

For Appellant: Shri S.K. Aggarwal, CAFor Respondent: Shri Vizay B. Vasanta, CIT- DR
Section 143(3)

from Inter Continental Hotels Group [Asia Pacific] India Pvt Ltd [IHGAP] towards provision of Management Support Services to be in the nature of Fees for Technical Services [FTS] under Article 12 of the India – Singapore DTAA. 4. At the very outset, the ld. counsel for the assessee stated that

ACIT Circle-28(1), Delhi vs. Sam Overseas, New Delhi

In the result, the appeal of the Revenue is dismissed and the appeal of the assessee is allowed

ITA 169/DEL/2021[2011-12]Status: DisposedITAT Delhi22 Jun 2023AY 2011-12

Bench: Shri G. S. Pannua N D Shri Challa Nagendra Prasad

For Appellant: Sr. Advocate
Section 195

upholding the disallowance of Rs.30,76,482/- being the commission paid to foreign agents, allegedly for the reason that the amount paid was fees for technical services and as such, TDS should have been deducted under section 195 of the Income tax Act, 1961 ("the Act"). 1.1. That

Sam Overseas, New Delhi vs. ACIT Circle- 24(1), New Delhi

In the result, the appeal of the Revenue is dismissed and the appeal of the assessee is allowed

ITA 1695/DEL/2020[2011-12]Status: DisposedITAT Delhi22 Jun 2023AY 2011-12

Bench: Shri G. S. Pannua N D Shri Challa Nagendra Prasad

For Appellant: Sr. Advocate
Section 195

upholding the disallowance of Rs.30,76,482/- being the commission paid to foreign agents, allegedly for the reason that the amount paid was fees for technical services and as such, TDS should have been deducted under section 195 of the Income tax Act, 1961 ("the Act"). 1.1. That

ACIT, Circle-18(1), New Delhi vs. Ncm (India) Limited, New Delhi

In the result, the appeal filed by the Revenue is dismissed

ITA 8766/DEL/2019[2013-14]Status: DisposedITAT Delhi21 Jun 2023AY 2013-14

Bench: The Ld. Cit(A). The Ld. Cit(A)

Section 143(3)Section 195Section 40Section 9(1)(vii)

assessee failed to deduct TDS u/s 195 of the Act on payments amounting to Rs.3,49,74,918/- in the nature of Fees for Technical Services (“FTS”, for short) made by it to non-resident during the year under consideration, therefore, the same are not deductable in view of section ... that the payment of Rs. 3,49,44.923/-made to the foreign entities towards cost of moulds is not in the nature of fees for technical services in terms of Explanation 2 to section 9(1)(vii) which restricts the meaning of fees for technical services to the consideration received

Ernt & Young U.S .LLP, Usa vs. ACIT, Circle International Taxation1(2)(2), New Delhi

In the result, the appeal of the assessee in ITA No

ITA 2332/DEL/2022[2019-20]Status: DisposedITAT Delhi20 Jun 2023AY 2019-20

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

For Appellant: Shri S. Ganesh, Sr. AdvFor Respondent: Shri Vizay B. Vasanta, CIT-DR
Section 115ASection 143(2)Section 143(3)

pressed. 5. The only issue that survives which needs adjudication is whether cost to cost reimbursement on account of secondment of employees was Fees for Technical Services [FTS] as defined under Article 12 of the India-USA Double Tax Avoidance Agreement [DTAA] and whether arrangement between the assessee and Indian ... there. In other words, salaries paid to such personnel like Mr. Laser are taxable in India and they cannot be considered to be fees for technical services. Further, even as per Section 9 of the Act, the payment cannot be treated as fees for technical service. Explanation 2 to Section

ACIT Circle-3(1)(1) International Taxation, New Delhi vs. Westin Hotel Mangment Lp, New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 2105/DEL/2022[2017-18]Status: DisposedITAT Delhi20 Jun 2023AY 2017-18

Bench: Shri Kul Bharat & Shri M. Balaganesh

For Appellant: Shri Amit AroraFor Respondent: Shri Vizay B. Vasanta, CIT(DR)
Section 143(2)Section 9(1)(vii)

Page 1 of 9 ITA No.- 2105/Del/2022 Westin Hotel Management LP marketing, reservation fee, centralized services fee and loyalty programs did not constitute Fee for Technical Services as defined u/s 9(1)(vii) of the Income Tax Act, 1961 or “Fee for included Services as defined under Article ... discipline. 5.7 As the issue of taxability of the appellants income from hotel related services provided to various hotels in India as royalty fees for technical service stands squarely covered by the judgement of the ITAT Delhi in case of Sheraton International Inc at ITA no. 50 to 55 /DEL/2006

Maersk Logistics & Services International B.V, Mumbai vs. Dy. Commissioner of Income Tax (International Taxation) Circle-3(2)(1), Mumbai

In the result, the appeals of the assesse are partly allowed

ITA 937/MUM/2023[2020-21]Status: DisposedITAT Mumbai19 Jun 2023AY 2020-21

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhailita Nos.909 & 937/Mum/2023 (A.Ys. 2017-18 & 2020-21)

For Appellant: Manish KanthFor Respondent: Chandip Singh
Section 144CSection 148Section 234BSection 270A(2)

learned AO erred in treating, the Network Fee of Rs. 29,53,69,631/-, earned during the year by the Appellant, as fees for technical services and royalty under the Income-tax Act, 1961 (Act). 3. On the facts and in the circumstances of the case ... learned AO erred in treating, the Network Fee of Rs. 29,53,69,631/-, earned during the year by the Appellant, as fees for technical services and royalty under Article 12 of the India- Netherlands Double Tax Avoidance Agreement (DTAA). 4. Without prejudice to the above and on facts

Maersk Logistics & Services International B.V., Mumbai vs. Dy. Commissioner of Income Tax International Taxation Circle-3(2)(1), Mumbai

In the result, the appeals of the assesse are partly allowed

ITA 909/MUM/2023[2017-18]Status: DisposedITAT Mumbai19 Jun 2023AY 2017-18

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhailita Nos.909 & 937/Mum/2023 (A.Ys. 2017-18 & 2020-21)

For Appellant: Manish KanthFor Respondent: Chandip Singh
Section 144CSection 148Section 234BSection 270A(2)

learned AO erred in treating, the Network Fee of Rs. 29,53,69,631/-, earned during the year by the Appellant, as fees for technical services and royalty under the Income-tax Act, 1961 (Act). 3. On the facts and in the circumstances of the case ... learned AO erred in treating, the Network Fee of Rs. 29,53,69,631/-, earned during the year by the Appellant, as fees for technical services and royalty under Article 12 of the India- Netherlands Double Tax Avoidance Agreement (DTAA). 4. Without prejudice to the above and on facts

Financiere Cvt (Now Ge Energy Power Conversion Group), Gurgaon vs. ACIT, Circle (1)(3)(1), International Taxation, New Delhi

In the result, appeal is allowed

ITA 7736/DEL/2019[2016-17]Status: DisposedITAT Delhi16 Jun 2023AY 2016-17

Bench: Shri G.S. Pannu & Shri Saktijit Deyassessment Year: 2016-17 Financiere Cvt (Now Ge Energy Versus Acit, Circle 1(3)(1), Power Conversion Group), 6Th International Taxation, Floor, Building 7A, Dlf Cyber New Delhi. City, Phase-3, Gurgaon. Pan: Aabcf6233C) (Appellant) (Respondent)

For Appellant: Sh. Ravi Sharma, Advoate &For Respondent: Sh. S.N. Pandey, Sr. DR

assessee towards services rendered to GE Power Conversion (India) Pvt. Ltd. and Converteam EDC Pvt. Ltd. is in the nature of fees for technical services(FTS). 3. Briefly, the facts relevant to this issue are, the assessee is a non- resident corporate entity and a tax resident of Republic ... which is as under :- "For the purposes of paragraph 2 of this Article, and subject to paragraph 5, of this Article, the term fees for technical services means payments of any kind of any person in consideration for the rendering of any technical or consultancy services (including the provision

Sms Concast Ag, New Delhi vs. DDIT, New Delhi

In the result, the appeal is partly allowed

ITA 1361/DEL/2012[2008-09]Status: DisposedITAT Delhi16 Jun 2023AY 2008-09

Bench: Shri G.S. Pannu, Hon’Ble & Shri Saktijit Deyassessment Year: 2008-09

Section 9(1)(vii)

designs amounting to 2,84,92,345/- forming integral part of the supply of equipment, received under various contracts is taxable as "Fees for Technical Services". (b) That the learned CIT (A) has failed to appreciate that on the facts and material on record, the receipts constituted "Business Profits ... assessee has raised the issue of taxability of an amount of Rs.2,84,92,345/- received from supply of drawings and designs as Fee for Technical Services (FTS). 4. Briefly the facts relating to the issue in dispute are, the assessee is a non-resident corporate entity incorporated in Switzerland

Lease Plan India P.Ltd., New Delhi vs. ITO, Ward-4(3), New Delhi

In the result, appeal is allowed

ITA 4714/DEL/2017[2013-14]Status: DisposedITAT Delhi15 Jun 2023AY 2013-14

Bench: Shri Saktijit Dey & Shri N.K. Billaiyaassessment Year: 2013-14 Lease Plan India P. Ltd., Versus Income-Tax Officer, C4C/332, Ground Floor, Ward 4(3), New Delhi. Janak Puri, New Delhi Pan: Aaacl6053B (Appellant) (Respondent) Assessee By : Sh. Nikhil Gupta, Advocate & Sh. Rachit Abhishek, Advocate Revenue By : Sh. Hemant Gupta, Sr. Dr

For Appellant: Sh. Nikhil Gupta, Advocate &For Respondent: Sh. Hemant Gupta, Sr. DR
Section 115JSection 40Section 9Section 9(1)(vii)

rendering a service that is ancillary and subsidiary to the application or enjoyment of a right and therefore is in the nature of “fees for technical services” as per paragraph 5 of Article 12 of the Double Taxation Avoidance Agreement between India and Netherlands. 4.1. That on the facts ... that guarantee commission is paid by the appellant to Lease Plan Corporation NV for providing consultancy services and the same are taxable as “fees for technical services”. 5. That the Commissioner of Income-tax (Appeals) erred on facts and in law in failing to appreciate that the aforesaid guarantee commission

DCIT 16(2), Mumbai vs. M/S. Bsr and Co. LLP, Mumbai

In the result ITA No. 723/Mum/2023 is dismissed, ITA No

ITA 723/MUM/2023[2014-15]Status: DisposedITAT Mumbai06 Jun 2023AY 2014-15

Bench: Shri Vikas Awasthy & Shri Gagan Goyal

For Appellant: Sh. Soumendu Kumar Das, Sr. DRFor Respondent: Sh. Ajit Kumar Jain CA &
Section 142(1)Section 40Section 90

made by the assessee to its associate concerns based in countries apart from Israel, Philippines, constitute payments for Independent Personal Service instead of ‘Fees for Technical Services” as defined under Article 12/13 of the respective DTAAs? 3. Whether on the facts and in the circumstances of the case ... Singapore), 7 (Netherlands) and 8 (France) in the table at para 5 above, will not come under Article 12 dealing with ‘Fees for Technical Services’, rather they fall under Article 7 dealing with ‘Business Profits’ and there is no Permanent Establishment (PE) in India, and therefore these payments would

Transporter Industry Internatinal Gmbh, Mumbai vs. Dy CIT International Taxation, Circle-4(1)(2), Mumbai

In the result, the appeal of the assessee is partly allowed for statistical purposes

ITA 1240/MUM/2021[2016-17]Status: DisposedITAT Mumbai31 May 2023AY 2016-17

Bench: Shri Aby T. Varkey, Jm & Shri S. Rifaur Rahman, Am आयकर अपील सं/ I.T.A. No.1240/Mum/2021 (निर्धारण वर्ा / Assessment Years: 2016-17) Transporter Industry बिधम/ Dcit, Int Tax Circle- International Gmbh. 4(1)(2) Vs. Kalisrabe 57, 74076 Air India Building, Heilbronn, Germany, Pin- Nariman Point, Mumbai- 999999. 400021. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aafct0013Q (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Nikil Tiwari Revenue By: Shri Soumedu Kumar Dash (Sr. Ar) सुनवाई की तारीख / Date Of Hearing: 30/03/2023 घोषणा की तारीख /Date Of Pronouncement: 31/05/2023 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Assessee Company Against The Order Of The Ao/Dcit, Circle-4(1)(2), Mumbai R.W.S 144C(13) Of The Income Tax Act, 1961 (Hereinafter “The Act”) Dated 25.04.2021 Pursuant To The Direction Of The Ld. Dispute Resolution Panel (Drp) Dated 18.03.2021. 2. Ground No. 1 Is General In Nature, So Dismissed. 3. Ground No. 3 Is A Legal Issue Which Has Been Raised By The Assessee Challenging The Action Of The Transfer Pricing Officer (Tpo) To Have Passed The Transfer Pricing (Tp) Order, After The Due Date Prescribed In Section 92(3A) R.W.S 153 Of The Act. Therefore, The Assessee Is Challenging The Action Of The Tpo In Passing Transfer Pricing Order After Limitation Period By Citing The Decision Of The Hon’Ble Madras High Court (Db) In The Case Of M/S. Saint Gobain

For Appellant: Shri Nikil TiwariFor Respondent: Shri Soumedu Kumar Dash (Sr. AR)
Section 153Section 3Section 92Section 92C

deleted. 15. Ground no. 10 is against the action of the AO to have made an addition of Rs.1,81,61,306/- as ‘Fees for Technical Services’ ignoring the assessee’s contention that it was purely reimbursement received for Construction and Management Expenses. 16. On this issue it is noted ... subsidiary, therefore it was contended that there is no service element involved and hence, are not in nature of fees for Technical Services. 17. Before the Ld. DRP, the assessee submitted additional evidences viz the backup invoices along with description of services and the Debit notes raised by the assessee

Country Inn & Suits by Raddison, Inn, Usa vs. ACIT, Circle 1(2) (1)International Taxation, Newdelhi

In the results, appeals are allowed as indicated above

ITA 2224/DEL/2022[2019-20]Status: DisposedITAT Delhi31 May 2023AY 2019-20

Bench: Shri G.S. Pannu & Shri Saktijit Dey

For Appellant: Sh. Pradeep Dinodia, CA &For Respondent: Sh. Bhuvnesh Kulshrestha, CIT-DR
Section 143(3)Section 144C(13)

only issue, arising in these appeals, relates to taxability or otherwise of the fee received from Indian franchise hotels towards centralized services as fees for technical services (FTS)/fees for included services (FIS) under Article 12(4)(a) of India-USA Double Taxation Avoidance Agreement (DTAA). 3. The facts involved ... meaning given in Article 12(3)(a), 12(4)(a) or 12(4){b) of the DTAA between India and USA or "fees for technical services" within the meaning given in Explanation 2 to section 9(1){vii). 73. In order to decide this issue relating to the applicability

Radisson Hotels International Incorporated, Usa vs. ACIT, Circle- 3(1)(2), International Taxation, Delhi

In the results, appeals are allowed as indicated above

ITA 2223/DEL/2022[2019-20]Status: DisposedITAT Delhi31 May 2023AY 2019-20

Bench: Shri G.S. Pannu & Shri Saktijit Dey

For Appellant: Sh. Pradeep Dinodia, CA &For Respondent: Sh. Bhuvnesh Kulshrestha, CIT-DR
Section 143(3)Section 144C(13)

only issue, arising in these appeals, relates to taxability or otherwise of the fee received from Indian franchise hotels towards centralized services as fees for technical services (FTS)/fees for included services (FIS) under Article 12(4)(a) of India-USA Double Taxation Avoidance Agreement (DTAA). 3. The facts involved ... meaning given in Article 12(3)(a), 12(4)(a) or 12(4){b) of the DTAA between India and USA or "fees for technical services" within the meaning given in Explanation 2 to section 9(1){vii). 73. In order to decide this issue relating to the applicability

Radisson Hotel International Incorporated, Usa vs. ACIT, Circle 3(1)(1), International Taxation, New Delhi

In the results, appeals are allowed as indicated above

ITA 2222/DEL/2022[2018-19]Status: DisposedITAT Delhi31 May 2023AY 2018-19

Bench: Shri G.S. Pannu & Shri Saktijit Dey

For Appellant: Sh. Pradeep Dinodia, CA &For Respondent: Sh. Bhuvnesh Kulshrestha, CIT-DR
Section 143(3)Section 144C(13)

only issue, arising in these appeals, relates to taxability or otherwise of the fee received from Indian franchise hotels towards centralized services as fees for technical services (FTS)/fees for included services (FIS) under Article 12(4)(a) of India-USA Double Taxation Avoidance Agreement (DTAA). 3. The facts involved ... meaning given in Article 12(3)(a), 12(4)(a) or 12(4){b) of the DTAA between India and USA or "fees for technical services" within the meaning given in Explanation 2 to section 9(1){vii). 73. In order to decide this issue relating to the applicability