Make-available test under the India-UK DTAA excluded routine support services from technical services taxation.

Management support services and reimbursement of expenses were held not taxable as Fee for Technical Services under the India-UK DTAA because the Revenue did not show any make-available of technical knowledge, skill, experience or know-how enabling the Indian entities to perform independently in future. The Tribunal applied its earlier view in the assessee's own case and treated the services as routine support services. Tax deducted at source credit was directed to be granted to the extent admissible in law, and the Assessing Officer was asked to verify the demand claim factually before making consequential revision.

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Issues: (i) Whether management support services fee and reimbursement of expenses received from Indian group entities were taxable as Fee for Technical Services under the India-UK Double Tax Avoidance Agreement; (ii) whether short credit of tax deducted at source required relief; (iii) whether the demand required factual verification and revision.

Issue (i): Whether management support services fee and reimbursement of expenses received from Indian group entities were taxable as Fee for Technical Services under the India-UK Double Tax Avoidance Agreement.

Analysis: The Tribunal followed its earlier decision in the assessee's own case for the immediately preceding year and applied the settled principle that services are taxable as technical services only when the agreement and evidence show that technical knowledge, skill, experience, or know-how is made available to the recipient so that it can perform the services independently in future. The services here were routine support services and the Revenue did not establish transfer of technology or enduring technical enablement to the Indian entities.

Conclusion: The receipts from management support services and reimbursement of expenses were not taxable as Fee for Technical Services under the India-UK Double Tax Avoidance Agreement, in favour of the assessee.

Issue (ii): Whether short credit of tax deducted at source required relief.

Analysis: The Tribunal accepted the assessee's claim to the extent of credit admissible in law and directed grant of tax deducted at source credit according to the applicable record and law.

Conclusion: The assessee was entitled to tax deducted at source credit in accordance with law.

Issue (iii): Whether the demand required factual verification and revision.

Analysis: The Tribunal found that the assessee's claim on the demand aspect required factual verification by the Assessing Officer before consequential adjustment of the demand.

Conclusion: The Assessing Officer was directed to verify the claim factually and revise the demand accordingly.

Final Conclusion: The appeal succeeded on the principal taxability issue and obtained consequential relief on credit and demand adjustment, while a premature ground was not adjudicated.

Ratio Decidendi: For taxation as technical services under the applicable treaty, the decisive test is whether the service recipient is made capable of independently applying technical knowledge, skill, experience, or know-how; routine support services without such make-available effect are not taxable as technical services.

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