“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

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

Six Continents Hotels Inc., Usa vs. ACIT Circle- 3 (1)(2) - International Taxation, New Delhi

In the result, Appeals of the Assessee in ITA No

ITA 373/DEL/2021[2017-18]Status: DisposedITAT Delhi24 Oct 2025AY 2017-18

Bench: S. Rifaur Rahman & Shri Yogesh Kumar U.S.

Section 143(3)Section 144C(13)

treating the same taxable as Fees for Technical Services ('FTS') under the provisions of the Income- tax Act, 1961 (‘Act’ for short) and Fees for Included Services ('FIS') under India-USA Double DTAA. Further, AO proposed an addition of INR 8,10,38,864/- in relation to reimbursements

Pratt & Whitney Canada Corp., Canada vs. Deputy Commissioner of Income Tax, International Taxation, Circle 2(2)(2), New Delhi

In the result, assessee’s appeals in ITA No

ITA 666/DEL/2025[2022-23]Status: DisposedITAT Delhi06 Oct 2025AY 2022-23

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri Rajan Vohra, CAFor Respondent: Shri Nikhil Kumar Govila, CIT-DR

Section 133(6)Section 147Section 153Section 234ASection 234B

being treated as FTS. Article 12(4)(b) of India-Canada DTTA provides as follows: Article 12.4. For the purposes of this Article, 'fees for included services' means payments of any kind to any person in consideration for the rendering of any technical or consultancy services (including through the provision ... skill, know-how, or processes or consist of the development and transfer of a technical plan or technical design. 5. Notwithstanding paragraph 4, 'fees for included services' does not include amount paid: (a) for services that are ancillary and subsidiary, as well as inextricably and essentially linked, to the sale

Pratt & Whitney Canada Corp., Canada vs. Deputy Commissioner of Income Tax, International Taxation, Circle 2(2)(2), New Delhi

In the result, assessee’s appeals in ITA No

ITA 665/DEL/2025[2018-19]Status: DisposedITAT Delhi06 Oct 2025AY 2018-19

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri Rajan Vohra, CAFor Respondent: Shri Nikhil Kumar Govila, CIT-DR

Section 133(6)Section 147Section 153Section 234ASection 234B

Pratt & Whitney Canada (Sea) Pte. Ltd., Singapore vs. Deputy Commissioner of Income Tax, International Taxation, Circle 2(2)(2), New Delhi

In the result, assessee’s appeals in ITA No

ITA 626/DEL/2025[2022-23]Status: DisposedITAT Delhi06 Oct 2025AY 2022-23

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri Rajan Vohra, CAFor Respondent: Shri Nikhil Kumar Govila, CIT-DR

Section 133(6)Section 147Section 153Section 234ASection 234B

Pratt & Whitney Canada (Sea) Pte. Ltd., Singapore vs. Deputy Commissioner of Income Tax, International Taxation, Circle 2(2)(2), New Delhi

In the result, assessee’s appeals in ITA No

ITA 620/DEL/2025[2018-19]Status: DisposedITAT Delhi06 Oct 2025AY 2018-19

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri Rajan Vohra, CAFor Respondent: Shri Nikhil Kumar Govila, CIT-DR

Section 133(6)Section 147Section 153Section 234ASection 234B

ACIT(It)-4(3)(2), Mumbai vs. Wells Fargo Bank National Association, Mumbai

ITA 3795/MUM/2024[2013-14]Status: DisposedITAT Mumbai26 Sept 2025AY 2013-14

Bench: Shri Saktijit Dey, Hon'Ble & Shri Girish Agrawal

For Appellant: Shri Niraj Sheth, AdvocateFor Respondent: Shri Krishna Kumar, Sr. DR

Section 139(1)Section 143(3)Section 147

noted that assessee is a tax resident of USA Article 12(4) of the treaty between India-USA which defines fees for included services as under: “4. For purposes of this Article

ACIT(It)-4(3)(2), Mumbai vs. Wells Fargo Bank National Association, Mumbai

In the result, appeal of the Revenue is dismissed

ITA 3794/MUM/2024[2014-15]Status: DisposedITAT Mumbai26 Sept 2025AY 2014-15

Bench: Shri Saktijit Dey, Hon'Ble & Shri Girish Agrawal

For Appellant: Shri Niraj Sheth, AdvocateFor Respondent: Shri Krishna Kumar, Sr. DR

Section 139(1)Section 143(3)Section 147

noted that assessee is a tax resident of USA Article 12(4) of the treaty between India-USA which defines fees for included services as under: “4. For purposes of this Article, "fees for included services" means payments of any kind to any person in consideration for the rendering

ACIT, Spl. Range-9, New Delhi vs. Timex Group India Ltd., New Delhi

In the result, the appeal of the assessee is partly allowed

ITA 7598/DEL/2019[2013-14]Status: DisposedITAT Delhi26 Sept 2025AY 2013-14

Bench: Shri Vimal Kumar & Shri Brajesh Kumar Singh

Section 143(3)Section 40Section 92Section 92BSection 92C

erred in upholding the action of the AO in holding that the amount of cost recharges are in the nature of fee for included services and fee for technical services under respective DTAAs and alleging that the Appellant was under the obligation to deduct tax under Section ... residents have not 'made available' these services to the assessee in India, and, therefore, the payments for these services are not taxable as 'fees for included services' as per India-USA DTAA or as 'fee for technical services' as per the provisions of India-Netherlands DTAA. The AO further noted

Timex Group India Ltd., New Delhi vs. Addi. CIT Spl.Range-9, New Delhi

In the result, the appeal of the assessee is partly allowed

ITA 7526/DEL/2019[2013-14]Status: DisposedITAT Delhi26 Sept 2025AY 2013-14

Bench: Shri Vimal Kumar & Shri Brajesh Kumar Singh[Assessment Year: 2013-14] M/S Timex Group India Ltd. Additional Commissioner Of Income 106-107, Ambadeep Building, Tax, Special Range-9, Kasturba Gandhi Marg, Vs New Delhi-110002 New Delhi-110001 Pan-Aaact0773C Assessee Revenue [Assessment Year: 2013-14] Additional Commissioner Of M/S Timex Group India Ltd. Income Tax, Special Range-9, 106-107, Ambadeep Building, New Delhi-110002 Vs Kasturba Gandhi Marg, New Delhi-110001 Pan-Aaact0773C Revenue Assessee Assessee By Shri Tushar Jarwal, Adv. Shri Aayush Nagpal, Adv. & Shri Vikrant Maheshwari, Adv. Revenue By Shri Rohit Garg, Cit-Dr Date Of Hearing 01.07.2025 Date Of Pronouncement 26.09.2025

Section 143(3)Section 40Section 92Section 92BSection 92C

erred in upholding the action of the AO in holding that the amount of cost recharges are in the nature of fee for included services and fee for technical services under the obligation to deduct tax under Section 195 of the Act. 14. That on the facts ... residents have not 'made available' these services to the assessee in India, and, therefore, the payments for these services are not taxable as 'fees for included services' as per India-USA DTAA or as 'fee for technical services' as per the provisions of India-Netherlands DTAA. The AO further noted

DCIT Intl. Tax Circle-1(2)(2), New Delhi vs. Everest Global Inc., Usa

Appeal is allowed

ITA 1270/DEL/2023[2018-19]Status: DisposedITAT Delhi10 Sept 2025AY 2018-19

Bench: Shri Challa Nagendra Prasad & Shri Naveen Chandra

For Appellant: Ms. Vandana Bhandri, CAFor Respondent: Shri Vikram Singh Sharma, Sr. DR

Section 143(2)

that amount is not chargeable to tax either as Fee for technical services under the provisions of the Income Tax Act 1961 or Fee for Included Services under Article 12 of India- USA DTAA." 4. Briefly stated, the facts of the case are that the assessee is a global consulting ... enabled to apply any technology on its own without recourse to the service provider i.e. the assessee. These services cannot be characterized as Fee for Included Services under Article 12(4)(b) of India- US treaty. 11. The ld AR pointed out that during AY 2015-16, though the assessee

Tyco Fire and Security India Private Limited, Bengaluru vs. Deputy Commissioner of Income-Tax, International Taxation, Circle 2(2), Bengaluru

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

ITA 443/BANG/2025[2014-15]Status: DisposedITAT Bangalore20 Aug 2025AY 2014-15

Bench: Shri Laxmi Prasad Sahu & Shri Soundararajan K.Assessment Year : 2014-15 The Deputy Commissioner Tyco Fire & Security India Of Income Tax, Private Ltd., International Taxation, D-601, Campus 6Th Floor, Circle 2(2), Rmz Centennial, Kundanahalli, Vs. Bangalore. Main Road, Mahadevapura S.O., Bengaluru North. Pan: Aabct 0087C Appellant Respondent Appellant By : Shri Ninad Patade, Ar Respondent By : Dr. Divya K.J., Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 08.07.2025 Date Of Pronouncement : 20.08.2025 O R D E R Per Soundararajan Kthis Appeal Filed By The Assessee Is Challenging The Order Of The Ld. Cit(Appeals), National Faceless Appeal Centre, Delhi (Nfac) Dated 20.12.2024 In Respect Of Assessment Year 2014-15. 2. The Brief Facts Of The Case Are That The Assessee Is A Company & A Part Of Tyco Group Which Is A Leader In Global Fire Safety & Security Page 2 Of 5

For Appellant: Shri Ninad Patade, ARFor Respondent: Dr. Divya K.J., CIT(DR)(ITAT), Bengaluru

Section 201(1)

payments to the said concerns. The assessee contended that remuneration given to the said entities would not qualify as fees for technical services / fees for included services under the India-Singapore and India-US DTAAs and therefore there is no default on the part of the assessee in not deducting

Ernst & Young U.S. LLP, Noida vs. Assistant Commissioner of Income Tax, Circle International Tax 1(2)(2), New Delhi

In the result, bot the appeals of the assessee stand allowed

ITA 1254/DEL/2025[2018-19]Status: DisposedITAT Delhi31 Jul 2025AY 2018-19

Bench: Shri Prakash Chand Yadav & Shri Naveen Chandraita No.1243/Del/2025 (Assessment Year 2022-23) Ernst & Young U.S. Llp Acit, Circle, C/O Authorized Representative, International Tax- Ernst & Young Llp, Vs. 1(2)(2), New Delhi. 5Th Floor, Tower-2, Plot No.2B, Sector-126, Noida, Gautam Budh Nagar (U.P.)-201304. Pan-Aadfe0355M (Appellant) (Respondent) Assessee By Shri S. Ganesh, Sr. Adv. & Ms. Ananya Kapoor, Adv. Department By Shri Nikhil Kumar Govila, Cit-Dr Date Of Hearing 17/07/2025 Date Of Pronouncement 31/07/2025 O R D E R Per Bench: The Present Appeals Of The Assessee Are Arising Out From The Order Of Ld. Assessing Officer Dated 18Th December, 2024 & 12Th December, 2024 & Relates To Assessment Year 2018-19 & Assessment Year 2022-23 Respectively.

Section 139(4)

further find that the A.O has held that the receipts are not in the nature of professional services and hence, these receipts were Fees for Included Services (FIS) covered by Article 12(4) of the DTAA and that the "make available" test is satisfied. 15. We further find that ... reason alluded by the DRP and the A.O. for holding that these receipts are taxable as Fees for Included Services under Article 12(4) and not Professional Services covered by Article 15(2) is that economists, engineers, MBA graduates, diploma holders and other trained technical personnel do not belong

Ernst & Young U.S. LLP, Noida vs. Assistant Commissioner of Income Tax, Circle International Tax 1(2)(2), New Delhi

In the result, bot the appeals of the assessee stand allowed

ITA 1243/DEL/2025[2022-23]Status: DisposedITAT Delhi31 Jul 2025AY 2022-23

Section 139(4)

Shell Information Technology International Bv, Mumbai vs. Deputy Commissioner of Income Tax (International Taxation )-4(2)(1), Mumbai

ITA 1750/MUM/2025[2022-23]Status: DisposedITAT Mumbai28 Jul 2025AY 2022-23

Bench: SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER SHRI PRABHASH SHANKAR (Accountant Member)

For Appellant: Shri Madhur AgarwalFor Respondent: Shri Satya Pal Kumar

Section 143(3)Section 144C(13)Section 144C(5)Section 2(24)Section 234BSection 270A

receipt as royalty do not require any direction from the penal as we have already upheld the taxability of the services as "fees for included service”. 10. The learned Counsel for the assessee explained the facts that the SITI BV is a company registered in the Netherlands. SITI ... IndoNetherlands Double Taxation Avoidance Convention. The learned counsel for the petitioner had also raised the plea that the memorandum of understanding concerning fees for included services referred in Article 12(4) of the Indo USA DTAA concerning the expression? Available? was also not considered by the Authority for Advance Rulings

Sanmoy Ray, Hooghly vs. Income Tax Officer 24(2), Hoohghly

In the result, appeal filed by the assessee is allowed

ITA 683/KOL/2025[2023-24]Status: DisposedITAT Kolkata24 Jul 2025AY 2023-24

Bench: Us, The Ld. Ar Argued That The Filing Of Form 67 Within The Stipulated Time Was A Directory Provision & Not Mandatory. It Was Averred That The Us-India Dtaa Would Come To The Rescue Of The Assessee In This Regard.

Section 143(1)Section 250Section 90

limiting the foreign tax credit. The preceding sentence shall not apply with respect to income dealt with in article 12 (Royalties and Fees for Included Services). The rules of this paragraph shall not apply in determining credits against United States tax for foreign taxes other than the taxes referred

Deputy Commissioner of Income Tax (International Taxation), Cirlce - 1(1), Bengaluru vs. Applied Materials India Private Limited, Bengaluru

ITA 1296/BANG/2024[2017-18]Status: DisposedITAT Bangalore24 Jul 2025AY 2017-18

Bench: Shri Prashant Maharishi & Shri Keshav Dubey

For Appellant: Dr. Divya K.J., CIT(DR)(ITAT), BengaluruFor Respondent: Shri Suryanarayan, AR

Section 133ASection 195Section 201Section 201(1)Section 9(1)(vii)

assessee has deducted and remitted applicable tax at source u/s 192 of the Act) • Reimbursement of salary costs are not taxable as Fees for Included Service [FIS] under India- US Tax treaty, since Applied Inc - has not rendered any 'service' to the assessee, did not make available any knowledge, skills ... India and USA as below. 30.1 The reimbursement of salary costs is primarily made to M/s Applied Materials Inc USA. Hence, the term "fees for included services" as defined in clause (4) of article 12 of the Double Taxation Avoidance Agreement between India USA is discussed herein below

Deputy Commissioner of Income Tax (International Taxation), Circle-1(1), Bengaluru vs. Applied Materials India Private Limited, Bengaluru

ITA 1295/BANG/2024[2016-17]Status: DisposedITAT Bangalore24 Jul 2025AY 2016-17

Bench: Shri Prashant Maharishi & Shri Keshav Dubey

For Appellant: Respondent by

Section 133ASection 195Section 201Section 201(1)Section 9(1)(vii)

assessee has deducted and remitted applicable tax at source u/s 192 of the Act) Reimbursement of salary costs are not taxable as Fees for Included Service [FIS] under India- US Tax treaty, since Applied Inc - has not rendered any 'service' to the assessee, did not make available any knowledge, skills

Deputy Commissioner of Income Tax (International Taxation), Circle - 1(1), Bengaluru vs. Applied Materials India Private Limited, Bengaluru

ITA 1294/BANG/2024[2014-15]Status: DisposedITAT Bangalore24 Jul 2025AY 2014-15

Bench: Shri Prashant Maharishi & Shri Keshav Dubey

For Appellant: Dr. Divya K.J., CIT(DR)(ITAT), BengaluruFor Respondent: Shri Suryanarayan, AR

Section 133ASection 195Section 201Section 201(1)Section 9(1)(vii)

M/S. Ceva Freight Llc, New Delhi vs. DDIT, New Delhi

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

ITA 1264/DEL/2014[2010-11]Status: DisposedITAT Delhi18 Jul 2025AY 2010-11

Bench: Ms. Madhumita Roy & Shri Naveen Chandra

For Appellant: Shri Salil Kapoor, AdvFor Respondent: Shri Vizay B. Vasanta, CIT-DR

Section 143(2)Section 143(3)Section 234B

support functions of Rs. 6,58,25,207 received by appellant from CEVA Freight India Pvt Ltd ("India affiliate" or "CEVA India") as Fees for Included services ("FTS/ FIS"), under Article 12 of India USA Tax Treaty ("Tax Treaty") by not appreciating: • that such functions do not 'make available ... Delhi] wherein, the Court accepts the same view in the para 3 of its order and held in para 19 that fees for included services in Article 13(4) of the Indo-UK DTAA clearly excludes managerial services. Once the expression managerial services is out the taxability under the treaty

Coursera Inc., California vs. ACIT, Circle Intl Tax-1(2)(1), Delhi

In the result, the appeal of the assessee is allowed

ITA 1958/DEL/2025[2022-23]Status: HeardITAT Delhi29 May 2025AY 2022-23

Bench: Shri Vijay Pal Rao & Shri Naveen Chandracoursera Inc. Vs. Acit, Circle-1(2)(1) 381, East Evelyn Avenue International Taxation, Mountain View, Civic Centre, Minto Road California United States New Delhi – 110002 Of America - 94040 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Aaicc4141K Appellant .. Respondent

For Appellant: Sh. Sachit Jolly, Sr. Adv, &For Respondent: Dr. Vedanshu Tripathi, CIT, DR

Section 139(1)Section 143Section 144C(5)Section 153Section 234BSection 270A

2416/D/2023 and 3646/D/2023 respectively), has categorically held that the amount received by the Appellant from Indian customers does not qualify as Fees for Included Services under Article 12(4) of the India-US Double Taxation Avoidance Agreement ('India-US tax treaty'). 4. That, on the facts and circumstances ... facility without human intervention to customers in the form educational consideration thereof could not be treated as technical services under the Act or fee for included services under the India-US tax treaty. 6. That on the facts and circumstances of the case the AO and DRP erred