"Make available" test limits treaty taxation of logistics services where no usable technical knowledge is transferred.

Under the India-Singapore treaty, logistics services are not fees for technical services unless they "make available" technical knowledge, skill, know-how or processes so the recipient can apply them independently. Mere performance of technical or logistics work is insufficient where no enduring technical ability is transferred. On the stated facts, the payer did not acquire such usable technical knowledge, and the Singapore recipient had no permanent establishment in India; the receipts were therefore outside article 12(4) and article 7, and no tax was deductible at source under section 195.

---

---

Issues: Whether the amounts paid under the logistics services agreement to the Singapore entity constituted fees for technical services under article 12(4) of the India-Singapore treaty and, if not, whether tax was deductible at source under section 195 of the Income-tax Act, 1961.

Analysis: The decisive question was whether the services rendered under the agreement made available technical knowledge, experience, skill, know-how or processes to the assessee so as to fall within article 12(4). Applying the settled meaning of "make available", the services must leave the recipient enabled to apply the technology on its own, and mere rendering of technical or logistics services is insufficient. On the facts, the Revenue did not establish that the assessee acquired such enduring technical ability or that the services transmitted usable technical knowledge to it. The payments were therefore outside the treaty definition of fees for technical services. Since the Singapore entity had no permanent establishment in India, the receipts were also not taxable as business income under article 7.

Conclusion: The payments were not fees for technical services, no tax was deductible at source under section 195, and the assessee succeeded.

Ratio Decidendi: Under a treaty provision using the expression "make available", services are taxable as technical services only when they transmit technical knowledge or skill to the recipient in a form enabling independent application of that technology; mere performance of the services does not suffice.

---