Freight logistics support services did not satisfy the make available test and were not taxable as technical fees.

Freight logistic support services were examined under section 9(1)(vii) and Article 12(5) of the India-US DTAA on the basis of the "make available" test. The court found that customs clearance support, documentation and coordination were operational assistance and did not involve a transfer of technical know-how or specialised skill enabling independent future use by the recipient. References to complex functions and global personnel development did not satisfy the treaty condition. The services were therefore not fees for technical services or fees for included services, and the Revenue's challenge failed.

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Issues: Whether freight logistic support services amounted to fees for technical services or fees for included services under section 9(1)(vii) of the Income-tax Act, 1961 and Article 12(5) of the India-US Double Taxation Avoidance Agreement.

Analysis: The decisive test was whether the services involved specialised knowledge, skill or expertise and whether such knowledge was made available to the recipient so as to enable independent use thereafter. The freight and logistics functions described in the record were held to be in the nature of operational assistance, including customs clearance support, documentation and coordination, and not a transfer of technical know-how. The references to complicated functions and global personnel development did not establish the make available condition. The services were therefore treated as routine or support services, not managerial, technical or consultancy services within the treaty sense.

Conclusion: The freight logistic support services did not constitute fees for technical services or fees for included services, and the Revenue's challenge on this question failed.

Ratio Decidendi: For a payment to be taxable as fees for technical services under the treaty, the service must both involve specialised technical or consultancy input and make that knowledge, skill or expertise available to the recipient for independent future use.

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