Make available test governs treaty taxation of BSP link service payments; no tax deduction was required.

Payments for BSP link services were not taxable in India as fees for included or technical services under Article 13 of the India-France DTAA because the services did not satisfy the "make available" standard. Although the arrangement covered development, testing, implementation and training, it did not transfer technical knowledge, experience, skill, know-how or processes enabling the recipient to apply the technology independently. On that basis, the sum was not chargeable to tax in India on this footing, and no deduction of tax at source under section 195 was required.

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Issues: Whether the amount paid for BSP link services was taxable in India as fees for technical or included services, so as to require deduction of tax at source under section 195.

Analysis: The payment was examined in the light of Article 13 of the India-France DTAA and clause 7 of its Protocol, which extends to the French treaty a narrower treaty scope adopted in later OECD treaties. Applying the "make available" standard reflected in the India-US and India-Portugal treaties, the services had to confer technical knowledge, experience, skill, know-how or processes enabling the recipient to apply the technology independently. The agreement relied upon showed development, testing, implementation and training connected with use of the system, but not a transfer of technical knowledge or know-how to the airlines or agents for independent application.

Conclusion: The payment was not fees for included services and was not chargeable to tax in India on that footing; consequently, the assessee was not required to deduct tax at source.

Ratio Decidendi: Services are taxable as fees for included or technical services under the relevant treaty only when they make available technical knowledge or know-how enabling the recipient to apply the technology independently.

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