Make available test under India-UK DTAA excludes IT support fees where no technical knowledge is transferred.

IT support payments made to a non-resident group company were examined under Article 13 of the India-UK DTAA to determine whether they constituted fee for technical services. Applying the make available test, the decisive question was whether technical knowledge, experience, skill, know-how or processes were transferred so that the recipient could apply them independently. As the services were rendered from the UK on a recurring group basis and the assessee did not acquire any technical knowledge or skill, the test was not satisfied. The payments were therefore not taxable as fee for technical services, and the Revenue's challenge failed.

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Issues: Whether payments made by the assessee to its non-resident group company for IT support services were chargeable as fee for technical services under Article 13 of the India-UK DTAA.

Analysis: The payments were examined in the light of the earlier decision in the assessee's own case for the immediately preceding assessment year, where the same services and agreement were considered. The decisive question was whether the services satisfied the make available test, namely whether technical knowledge, experience, skill, know-how, or processes were transferred so that the assessee could apply them independently. The record showed that the services were rendered from the UK for the group as a whole on a recurring basis, and the assessee did not gain any technical knowledge or skill from the arrangement.

Conclusion: The make available test was not satisfied and the payments were not taxable as fee for technical services under Article 13 of the India-UK DTAA; the Revenue's challenge failed.

Ratio Decidendi: IT support services do not constitute fee for technical services under Article 13 of the India-UK DTAA unless they result in transfer of technical knowledge, skill, or know-how to the recipient so as to satisfy the make available test.

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