Make available clause limits fees for technical services taxation where no independent transfer of skill occurs.

Services rendered by an Indian affiliate are taxable as fees for technical services under the India-Singapore DTAA only if they satisfy the make available clause by transferring technical knowledge, skill, experience or processes so the recipient can apply them independently. The Tribunal held that continued dependence on the service provider over many years showed the recipient had not been enabled to perform the functions on its own. Mere incidental benefit or an enduring advantage was insufficient because the decisive test was whether the technology or skill had been absorbed and could be used without further assistance. On that basis, the income was not taxable as fees for technical services, and the finding was in favour of the assessee.

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Issues: Whether the income from information technology and other administrative services rendered by the assessee to its Indian affiliate was taxable as fees for technical services under the India-Singapore Double Taxation Avoidance Agreement, applying the make available clause.

Analysis: The Tribunal held that, to fall within the treaty definition of fees for technical services, the services had to satisfy the make available requirement and enable the recipient to apply the technical knowledge, experience, skill, or processes independently. On the facts, the agreement had continued for many years, which indicated that the recipient had not been equipped to perform the services on its own. Mere incidental benefit or enduring advantage was not enough, since the real test was whether technology or skill had been transferred and absorbed by the recipient so that it could operate without dependence on the service provider.

Conclusion: The income did not constitute fees for technical services under the India-Singapore Double Taxation Avoidance Agreement, and the finding was in favour of the assessee.

Final Conclusion: The appeal failed because no substantial question of law arose from the Tribunal's application of the treaty make available standard to the service arrangement.

Ratio Decidendi: Under a make available clause, services are taxable as fees for technical services only if they transfer technical knowledge, skill, or processes in a manner that enables the recipient to independently apply them after the contract ends.

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