Project monitoring services not a fee
The Authority of Advance Rulings has said that project monitoring services do not amount to “making available” the technical knowledge, experience etc and so, cannot be taxed.
By ET Bureau |
In a recent ruling, the Authority of Advance Rulings has said that project monitoring services do not amount to ���making available��� the technical knowledge, experience etc and so, cannot be taxed as ���fees for technical services��� under Double Taxation Convention with Australia. The income from such receipts would be taxed as business profits under Article 7 of the Convention.
In this case, an Australian company provided professional services to an Indian company. The nature of services was to monitor the detailed project schedule, generate project monitoring report and provide fortnightly status report to the Indian company.
AAR has laid down the pre-requisite for the application of the concept of ���make available��� is that the recipient of the services should be able to use the technical knowledge, experience etc subsequently on its own without any recourse to the service provider.
In this case, an Australian company provided professional services to an Indian company. The nature of services was to monitor the detailed project schedule, generate project monitoring report and provide fortnightly status report to the Indian company.
AAR has laid down the pre-requisite for the application of the concept of ���make available��� is that the recipient of the services should be able to use the technical knowledge, experience etc subsequently on its own without any recourse to the service provider.
Start a SIP with as low as ₹500 with ET Money App!
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
