Make-available test excludes cloud platform subscription receipts from fees for technical services taxation in India.

Subscription-based access to a cloud analytics platform was not taxable as fees for technical services under Article 12(4) of the India-US tax treaty or the Income-tax Act because the provider did not make available technical knowledge, experience, skill or know-how to Indian customers. Mere online access to an automated platform was insufficient where recipients were not enabled to perform the function independently. The Tribunal also noted that the group's global loss position did not change the treaty character of the receipts. Ancillary issues concerning tax credit and refund verification were remanded for verification, and the penalty ground was treated as premature.

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Issues: Whether the subscription receipts from Indian customers were taxable as fees for technical services under Article 12(4) of the India-US tax treaty and the Income-tax Act, 1961.

Analysis: The assessee provided access to a cloud-based analytics platform on a subscription basis. The receipts were examined in the light of the treaty test requiring that technical or consultancy services must make available technical knowledge, experience, skill or know-how to the recipient. The record showed that the assessee had not transferred or made available any technology to Indian customers. The Tribunal also noted the tax residency certificate and applied the coordinate bench view that mere provision of online access or automated platform services does not, by itself, constitute technical services where the recipient is not enabled to perform the function independently. The Revenue's reliance on the global loss position of the group did not alter the treaty character of the receipts.

Conclusion: The receipts did not qualify as fees for technical services and were not taxable on that basis in India; the assessee succeeded on the main issue.

Final Conclusion: The appeal was allowed on the principal taxability issue, while the ancillary matters relating to tax credit and refund verification were sent back for verification and the penalty ground was treated as premature.

Ratio Decidendi: Subscription-based access to an online platform is not taxable as fees for technical services unless the service provider makes available technical knowledge, skill, or know-how to the recipient so that it can be independently used by the recipient.

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