Make available test fails for innovation programme support; payments not taxable in India and no tax deduction required.

Payments for workshop, screening, assessment, and commercialization support under the innovation programme were not fees for included services under Article 12(4)(b) of the India-USA DTAA because the services were facilitative and advisory and did not make available technical knowledge, skill, know-how, or processes to the Indian participants for independent future use. As the "make available" test was not satisfied, the amounts were not taxable in India on that basis. The recipient also had no permanent establishment in India, and the payer was not required to deduct tax at source under Section 195 of the Income-tax Act, 1961.

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Issues: Whether the payments made by FICCI to the University of Texas institute under the innovation programme constituted fees for included services under Article 12(4)(b) of the India-USA DTAA so as to be taxable in India and require deduction of tax at source under Section 195 of the Income-tax Act, 1961.

Analysis: The governing test under Article 12(4)(b) is whether the recipient's services make available technical knowledge, experience, skill, know-how, or processes to the service recipient so that the recipient can apply them independently in future. On the material placed, the workshop, screening, assessment, and commercialization support were essentially facilitative and advisory in nature. The presentations and course material showed exposure to commercialization concepts, entrepreneurship orientation, and business development techniques, but not a transmission of technical knowledge or skills that remained with the Indian participants after the programme ended. The services were therefore not shown to satisfy the "make available" requirement, and the recipient had no permanent establishment in India.

Conclusion: The payments did not amount to fees for included services under Article 12(4)(b) of the DTAA and were not taxable in India on that basis. FICCI was not required to deduct tax at source under Section 195 of the Income-tax Act, 1961.

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