Bioanalytical service fees are business profits, not technical fees or royalty, absent making available know-how or a permanent establishment.

Fees for bioequivalence and bioanalytical studies were not taxable in India as fees for technical services, fees for included services, or royalty because the service provider only used its own expertise to generate final reports and did not transfer or make available technical knowledge, skill, know-how, or a technical plan to the Indian clients. The receipt of samples and any resulting intellectual property did not alter that position. The income was characterised as business profits, taxable in India only if the non-resident had a permanent establishment in India; none was established on the record, so the income was not chargeable to tax in India.

---

---

Issues: Whether the fees received for conducting bioequivalence and bioanalytical studies for Indian pharmaceutical companies were taxable in India as fees for technical services, fees for included services, or royalty, and if not, whether they were taxable only as business profits in the absence of a permanent establishment in India.

Analysis: The agreement and surrounding facts showed that the applicant used its own scientific expertise to conduct the tests and furnished only the final reports and conclusions to the Indian clients. The technical methods, protocols, know-how, and analytical procedures were not transferred or made available to the clients so as to enable them to independently perform such work in future. The receipt of tested samples or ownership of resulting intellectual property did not amount to making available technical knowledge, experience, skill, know-how, or a technical plan. The consideration therefore did not fall within the expression "fees for included services" under Article 12(4)(b) of the treaty, and it also did not constitute royalty. As the income arose from the applicant's business of providing bioanalytical services, it was business income taxable in India only if the applicant had a permanent establishment, which was not established on the record.

Conclusion: The fee was not taxable in India as fees for technical services, fees for included services, or royalty, and was taxable only as business profits; in the absence of a permanent establishment in India, the income was not chargeable to tax in India.

Ratio Decidendi: Mere delivery of final technical results from a service contract does not amount to making available technical knowledge, experience, skill, know-how, or a technical plan to the recipient; such receipts are business profits unless the service provider has a permanent establishment in India.

---