Background verification receipts not treated as royalties or technical services where only factual screening reports were provided.

Receipts from background verification and employment screening services were held not to constitute royalties or fees for technical services under Article 13 of the India-UK Double Taxation Avoidance Agreement. The services were limited to verifying candidate information and producing factual reports for internal use, without any use of copyright or rights to reproduce, distribute, modify, or commercially exploit the reports. They also did not involve imparting technical knowledge, skill, experience, know-how, or processes, and the make available condition was not met. The Tribunal's factual findings were accepted, and no substantial question of law arose.

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Issues: Whether receipts from background verification and employment screening services constituted royalties or fees for technical services under Article 13 of the India-UK Double Taxation Avoidance Agreement, and whether the appeal raised any substantial question of law.

Analysis: The services were confined to verification of candidate information and preparation of factual screening reports. The reports did not amount to use of copyright or any copyrightable work, and the client obtained only the factual findings for internal use without rights of public display, reproduction, distribution, modification, or commercial exploitation. The services also did not involve imparting of commercial experience, skill, know-how, or technical knowledge, nor did they satisfy the make available requirement for fees for technical services. The Tribunal's factual findings were accepted, and no contrary legal basis was found to disturb them.

Conclusion: The receipts were not taxable as royalties or fees for technical services under Article 13, and no substantial question of law arose. The conclusion is in favour of the assessee.

Ratio Decidendi: Background verification and factual screening services that merely validate information and provide reports for internal use do not amount to royalties or fees for technical services unless they involve use of copyright or make available technical knowledge, skill, experience, know-how, or processes.

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