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“fees for included services”

International TaxDTAA FTS ArticleDTAA FTS Article385 judgments

The decision most relied on for fees for included services is CIT v. De Beers India Minerals (P.) Ltd. (346 ITR 467), cited in 371 judgments on BharatTax.

Leading authorities on fees for included services

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.

Asia Satellite Telecommunications Co. Ltd. v. DIT
332 ITR 340 · 2011 · High Court
359
citing judgments

Payments for the use of equipment, such as satellite transponders, do not constitute 'royalty' under Section 9(1)(vi) of the Income-tax Act, 1961, or under applicable tax treaties, especially when there is no transfer of the right to use a process or underlying technology.

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.

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.

CIT v. Kotak Securities Ltd.
383 ITR 1 · 2016 · Supreme Court
203
citing judgments

Fees for technical services under Section 9(1)(vii) can include payments for fully automated services even without direct human interface, as modern technological developments blur the specific human element in such processes.

Raymond Ltd. v. Dy. CIT
86 ITD 791 · 2003 · ITAT
154
citing judgments

For services to qualify as 'Fees for Technical Services' or 'Fees for Included Services' under Double Taxation Avoidance Agreements (DTAAs), they must 'make available' technical knowledge, experience, skill, or processes to the recipient, enabling them to apply such expertise independently.

EPRSS Prepaid Recharge Services India Pvt.Ltd. v. ITO
100 Taxmann.com 52 · 2018 · Reported
101
citing judgments

Payments made for the use of cloud space do not constitute royalty payments for the purpose of Indian income tax, especially when they relate to accessing standard and automated services rather than acquiring rights to copyrighted material.

Steria (India) Ltd. v. CIT
386 ITR 390 · 2016 · High Court
83
citing judgments

Managerial services are not considered 'fees for included services' under Article 13(4) of the India-UK Double Taxation Avoidance Agreement, thus payments for such services are not taxable as FTS under the treaty.

Judgments citing fees for included services

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

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

ITA 115/DEL/2020[2012-13]Status: DisposedITAT Delhi27 Dec 2023AY 2012-13

Bench: Shri Shamim Yahya & Shri Challa Nagendra Prasada.Yr. : 2012-13 Sunbeam Lightweighting Vs. Dcit, Circle 24(2), Solutions Pvt. Ltd. New Delhi – 110002 (Formerly: Sunbeam Auto Pvt. Ltd), 38/6, K.M. Stone, Delhi-Jaipur Highway, Narsingpur, Gurgaon-122001 (Pan: Aafcn8583K) (Appellant) (Respondent) & Ay 2012-13 Dcit, Circle 24(2), Sunbeam Auto Pvt. Ltd, Room No. 328, Cr Building, Vs. S-323, Panchsheel Park, Ip Estate, New Delhi – 110 017 New Delhi – 2 (Pan: Aaabcs2948F) (Respondent) (Appellant) Assessee By : Ms. Sashi Kapila, Adv., Sh. Sushil Kumar, Adv. & Sh. Parvesh Kumar, Adv. Department By : Sh. Anuj Garg, Sr. Dr. Date Of Hearing : 20.12.2023 Date Of Pronouncement : 27.12.2023 Order Per Shamim Yahya, Am : The Assessee As Well As Revenue Has Filed The Cross Appeals Against The Order Of The Ld. Cit(A)-8, New Delhi Relating To Assessment Year 2012-13 On The Following Grounds:-

For Appellant: Ms. Sashi Kapila, Adv., Sh. SushilFor Respondent: Sh. Anuj Garg, Sr. DR
Section 143(3)Section 14ASection 264Section 40Section 43(1)Section 43(6)

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-USA Double Taxation Avoidance Agreement (“India-USA DTAA”). Further, Explanation to section 9(2) clarified that ... received by it from M/s. Sunbeam Auto Pvt. Ltd. 3. As per Article 12(4) of the India USA DTAA, the term FIS (Fee for Included Services) means payments of any kind to any person in consideration for the rendering of any technical or consultancy services. It is apparent that

Hcl Technologies Italy S.P.A, Italy vs. ACIT Circle -2(1)(1) International Taxation, New Delhi

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

ITA 596/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

assessing officer erred in holding that the payment received by the Appellant for certain categories of 'Infrastructure Services', not excluded from scope of Fees for Included Services ("FIS") by the assessing officer in remand report submitted before the DRP, were in the nature of FIS under section ... remains with HCLT. vi) Services have been made available in India. vii) The remittances were in the nature of Fees for Technical Services/ Fees for Included Services, which has been made available by the employees of the assessee. viii) Make available clause in the DTAA is not required

Hcl Technologies Belgium Bvba, New Delhi vs. ACIT Circle -2(1)(1) International Taxation, New Delhi

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

ITA 595/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

assessing officer erred in holding that the payment received by the Appellant for certain categories of 'Infrastructure Services', not excluded from scope of Fees for Included Services ("FIS") by the assessing officer in remand report submitted before the DRP, were in the nature of FIS under section ... remains with HCLT. vi) Services have been made available in India. vii) The remittances were in the nature of Fees for Technical Services/ Fees for Included Services, which has been made available by the employees of the assessee. viii) Make available clause in the DTAA is not required

Hcl Mexico S. De R L, Mexico vs. ACIT Circle -2(1)(1) International Taxation, New Delhi

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

ITA 594/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

assessing officer erred in holding that the payment received by the Appellant for certain categories of 'Infrastructure Services', not excluded from scope of Fees for Included Services ("FIS") by the assessing officer in remand report submitted before the DRP, were in the nature of FIS under section ... remains with HCLT. vi) Services have been made available in India. vii) The remittances were in the nature of Fees for Technical Services/ Fees for Included Services, which has been made available by the employees of the assessee. viii) Make available clause in the DTAA is not required

Hcl Hongkong Sar Limited, New Delhi vs. ACIT Circle -2(1)(1) International Taxation, New Delhi

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

ITA 593/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

assessing officer erred in holding that the payment received by the Appellant for certain categories of 'Infrastructure Services', not excluded from scope of Fees for Included Services ("FIS") by the assessing officer in remand report submitted before the DRP, were in the nature of FIS under section ... remains with HCLT. vi) Services have been made available in India. vii) The remittances were in the nature of Fees for Technical Services/ Fees for Included Services, which has been made available by the employees of the assessee. viii) Make available clause in the DTAA is not required

Hcl Technologies (Proprietary) Limited, New Delhi vs. ACIT Circle -2(1)(1) International Taxation, New Delhi

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

ITA 567/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

assessing officer erred in holding that the payment received by the Appellant for certain categories of 'Infrastructure Services', not excluded from scope of Fees for Included Services ("FIS") by the assessing officer in remand report submitted before the DRP, were in the nature of FIS under section ... remains with HCLT. vi) Services have been made available in India. vii) The remittances were in the nature of Fees for Technical Services/ Fees for Included Services, which has been made available by the employees of the assessee. viii) Make available clause in the DTAA is not required

Hcl Technologies Bv, Netherlands vs. ACIT Circle -2(1)(1) International Taxation, New Delhi

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

ITA 565/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

assessing officer erred in holding that the payment received by the Appellant for certain categories of 'Infrastructure Services', not excluded from scope of Fees for Included Services ("FIS") by the assessing officer in remand report submitted before the DRP, were in the nature of FIS under section ... remains with HCLT. vi) Services have been made available in India. vii) The remittances were in the nature of Fees for Technical Services/ Fees for Included Services, which has been made available by the employees of the assessee. viii) Make available clause in the DTAA is not required

Hcl Australia Services Pty Ltd, Australia vs. ACIT Circle -2(1)(1) International Taxation, New Delhi

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

ITA 564/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

assessing officer erred in holding that the payment received by the Appellant for certain categories of 'Infrastructure Services', not excluded from scope of Fees for Included Services ("FIS") by the assessing officer in remand report submitted before the DRP, were in the nature of FIS under section ... remains with HCLT. vi) Services have been made available in India. vii) The remittances were in the nature of Fees for Technical Services/ Fees for Included Services, which has been made available by the employees of the assessee. viii) Make available clause in the DTAA is not required

Hcl Technologies Maylasia Sdn Bhd, Malaysia vs. ACIT Circle -2(1)(1) International Taxation, New Delhi

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

ITA 563/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

assessing officer erred in holding that the payment received by the Appellant for certain categories of 'Infrastructure Services', not excluded from scope of Fees for Included Services ("FIS") by the assessing officer in remand report submitted before the DRP, were in the nature of FIS under section ... remains with HCLT. vi) Services have been made available in India. vii) The remittances were in the nature of Fees for Technical Services/ Fees for Included Services, which has been made available by the employees of the assessee. viii) Make available clause in the DTAA is not required

Hcl (Brazil) Technologies Da Informacao Eireli, New Delhi vs. ACIT Circle -2(1)(1) International Taxation, New Delhi

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

ITA 562/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

assessing officer erred in holding that the payment received by the Appellant for certain categories of 'Infrastructure Services', not excluded from scope of Fees for Included Services ("FIS") by the assessing officer in remand report submitted before the DRP, were in the nature of FIS under section ... remains with HCLT. vi) Services have been made available in India. vii) The remittances were in the nature of Fees for Technical Services/ Fees for Included Services, which has been made available by the employees of the assessee. viii) Make available clause in the DTAA is not required

Hcl Canada Inc., Canada vs. ACIT Circle -2(1)(1) International Taxation, New Delhi

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

ITA 561/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

assessing officer erred in holding that the payment received by the Appellant for certain categories of 'Infrastructure Services', not excluded from scope of Fees for Included Services ("FIS") by the assessing officer in remand report submitted before the DRP, were in the nature of FIS under section ... remains with HCLT. vi) Services have been made available in India. vii) The remittances were in the nature of Fees for Technical Services/ Fees for Included Services, which has been made available by the employees of the assessee. viii) Make available clause in the DTAA is not required

Hcl Poland Sp Zoo, Poland vs. ACIT Circle -2(1)(1) International Taxation, New Delhi

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

ITA 560/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

assessing officer erred in holding that the payment received by the Appellant for certain categories of 'Infrastructure Services', not excluded from scope of Fees for Included Services ("FIS") by the assessing officer in remand report submitted before the DRP, were in the nature of FIS under section ... remains with HCLT. vi) Services have been made available in India. vii) The remittances were in the nature of Fees for Technical Services/ Fees for Included Services, which has been made available by the employees of the assessee. viii) Make available clause in the DTAA is not required

Hcl Technologies Germany Gmbh, Germany vs. ACIT Circle -2(1)(1) International Taxation, New Delhi

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

ITA 559/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

assessing officer erred in holding that the payment received by the Appellant for certain categories of 'Infrastructure Services', not excluded from scope of Fees for Included Services ("FIS") by the assessing officer in remand report submitted before the DRP, were in the nature of FIS under section ... remains with HCLT. vi) Services have been made available in India. vii) The remittances were in the nature of Fees for Technical Services/ Fees for Included Services, which has been made available by the employees of the assessee. viii) Make available clause in the DTAA is not required

Hcl Technologies France, New Delhi vs. ACIT, Circle-Int. Tax 2(1)(1), New Delhi

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

ITA 544/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

assessing officer erred in holding that the payment received by the Appellant for certain categories of 'Infrastructure Services', not excluded from scope of Fees for Included Services ("FIS") by the assessing officer in remand report submitted before the DRP, were in the nature of FIS under section ... remains with HCLT. vi) Services have been made available in India. vii) The remittances were in the nature of Fees for Technical Services/ Fees for Included Services, which has been made available by the employees of the assessee. viii) Make available clause in the DTAA is not required

Hcl Technologies Philippines Inc., New Delhi vs. ACIT, Circle-Int. Tax 2(1)(1), New Delhi

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

ITA 543/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

assessing officer erred in holding that the payment received by the Appellant for certain categories of 'Infrastructure Services', not excluded from scope of Fees for Included Services ("FIS") by the assessing officer in remand report submitted before the DRP, were in the nature of FIS under section ... remains with HCLT. vi) Services have been made available in India. vii) The remittances were in the nature of Fees for Technical Services/ Fees for Included Services, which has been made available by the employees of the assessee. viii) Make available clause in the DTAA is not required

Hcl Singapore Pte Ltd, New Delhi vs. ACIT Circle International Taxation 2(1)(1), New Delhi

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

ITA 537/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

assessing officer erred in holding that the payment received by the Appellant for certain categories of 'Infrastructure Services', not excluded from scope of Fees for Included Services ("FIS") by the assessing officer in remand report submitted before the DRP, were in the nature of FIS under section ... remains with HCLT. vi) Services have been made available in India. vii) The remittances were in the nature of Fees for Technical Services/ Fees for Included Services, which has been made available by the employees of the assessee. viii) Make available clause in the DTAA is not required

Hcl Technologies Denmark Aps, New Delhi vs. ACIT Circle- 2(1)(1) International Taxation, New Delhi

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

ITA 528/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

assessing officer erred in holding that the payment received by the Appellant for certain categories of 'Infrastructure Services', not excluded from scope of Fees for Included Services ("FIS") by the assessing officer in remand report submitted before the DRP, were in the nature of FIS under section ... remains with HCLT. vi) Services have been made available in India. vii) The remittances were in the nature of Fees for Technical Services/ Fees for Included Services, which has been made available by the employees of the assessee. viii) Make available clause in the DTAA is not required

M/S. Exl Service.Com Llc, Mumbai vs. ADIT, New Delhi

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

ITA 5628/DEL/2014[2005-06]Status: DisposedITAT Delhi20 Dec 2023AY 2005-06

Bench: Shri N.K. Billaiya & Ms Astha Chandra

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri Vizay B. Vasanta, CIT-DR
Section 143(3)

days in any twelve-month period ; (l) the furnishing of services, other than included services as defined in Article 12 (Royalties and Fees for Included Services), within a Contracting State by an enterprise through employees or other personnel, but only if: (i ) activities of that nature continue within that State

M/S. Exl Service.Com Llc, Mumbai vs. ADIT, New Delhi

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

ITA 5627/DEL/2014[2004-05]Status: DisposedITAT Delhi20 Dec 2023AY 2004-05

Bench: Shri N.K. Billaiya & Ms Astha Chandra

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri Vizay B. Vasanta, CIT-DR
Section 143(3)

days in any twelve-month period ; (l) the furnishing of services, other than included services as defined in Article 12 (Royalties and Fees for Included Services), within a Contracting State by an enterprise through employees or other personnel, but only if: (i ) activities of that nature continue within that State

ADIT, New Delhi vs. M/S. Exl Service.Com Inc, Usa

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

ITA 4989/DEL/2014[2005-06]Status: DisposedITAT Delhi20 Dec 2023AY 2005-06

Bench: Shri N.K. Billaiya & Ms Astha Chandra

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri Vizay B. Vasanta, CIT-DR
Section 143(3)

days in any twelve-month period ; (l) the furnishing of services, other than included services as defined in Article 12 (Royalties and Fees for Included Services), within a Contracting State by an enterprise through employees or other personnel, but only if: (i ) activities of that nature continue within that State