Make available test for technical services under the India-Singapore treaty failed for overseas testing receipts

Consideration for overseas testing and issue of test reports was not fees for technical services under article 12(4) of the India-Singapore tax treaty because the services did not make available technical knowledge, experience, skill, know-how or processes to the Indian recipient. The recipient received only the test reports and did not acquire the ability to apply the underlying technique independently, nor was any technical plan or design transferred. On that basis, the receipts were not taxable in India as fees for technical services.

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Issues: Whether the consideration received for overseas testing and issue of test reports constituted fees for technical services under article 12(4) of the India-Singapore tax treaty.

Analysis: The treaty provision applied only where the services made available technical knowledge, experience, skill, know-how or processes, or consisted of development and transfer of a technical plan or design. The testing services rendered in Singapore resulted only in test reports being supplied to the Indian recipient. The recipient did not acquire technical knowledge enabling it to apply the technology independently in future, nor was any technical plan or design transferred. Mere performance of sophisticated testing, without transmission of the underlying technique to the recipient, did not satisfy the treaty condition of make available.

Conclusion: The receipts did not fall within fees for technical services under article 12(4) of the India-Singapore tax treaty and were not taxable in India on that basis.

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