Consulting fees to Indian entities not taxable as royalty or fees for included services where no know-how was made available.

Consulting fees received for advising, recommending, assisting, conducting training programmes and reviewing healthcare projects were held not to constitute royalty because they were not consideration for the use of copyright, trademark, or industrial, commercial or scientific experience. The receipts also were not fees for included services because no technical knowledge, experience, skill, know-how or process was made available to the Indian recipients. The Tribunal further noted the assessee had no permanent establishment in India and relied on its own earlier orders in the assessee's favour, which had not been reversed. The receipts were therefore treated as not taxable in India as royalty or fees for included services.

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Issues: Whether the consulting fees received by the assessee from Indian entities were taxable as royalty or fees for included services, or were not taxable in India in the absence of a permanent establishment.

Analysis: The Tribunal noted that the identical issue had already been decided in the assessee's own case for earlier assessment years. Those decisions had held that the consideration was paid for advising, recommending, assisting, conducting training programmes and reviewing healthcare projects, and that such receipts did not amount to royalty because they were not consideration for the use of any copyright, trademark or industrial, commercial or scientific experience. The receipts also did not constitute fees for included services because no technical knowledge, experience, skill, know-how or process was made available. The Tribunal further noted that the assessee had no permanent establishment in India and that the earlier orders, though carried in appeal by the Revenue, had not been reversed.

Conclusion: The receipts were not taxable as royalty or fees for included services in India, and the appeal filed by the Assessing Officer was dismissed.

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