Make available test under India-Singapore DTAA defeated fees for technical services treatment for ongoing support services.

Receipts from ongoing IT and administrative support services to an Indian affiliate were not fees for technical services under Article 12(4)(b) of the India-Singapore DTAA because the services did not make available technical knowledge, experience, skill, know-how or processes for independent use by the recipient. The recurring group-support arrangement showed continued dependence on the provider, and mere incidental or enduring benefit was insufficient without transfer of technology or independent usability. On that basis, the receipts were not taxable as fees for technical services and the additions were deleted.

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Issues: Whether receipts from provision of information technology and other administrative services to the Indian affiliate constituted fees for technical services under Article 12(4)(b) of the India-Singapore DTAA.

Analysis: The agreement showed that the services were rendered on an ongoing basis as group support functions. Under Article 12(4)(b), such receipts qualify as fees for technical services only if the services make available technical knowledge, experience, skill, know-how or processes so that the recipient can apply the same independently. The recurring nature of the services indicated that the Indian recipient remained dependent on the assessee year after year and was not enabled to perform the services on its own. Mere incidental or enduring benefit was insufficient in the absence of a transfer of technology or independent usability by the recipient.

Conclusion: The receipts were not fees for technical services under the DTAA and were not taxable on that basis.

Final Conclusion: The additions were deleted and the assessee's appeals succeeded.

Ratio Decidendi: Services are taxable as fees for technical services under a treaty only when the service provider makes available technical knowledge, experience, skill, know-how or processes enabling the recipient to apply them independently without continued dependence on the provider.

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