Make available requirement under India-UK DTAA not met, so intra-group and advisory service receipts were not taxable as fees for technical services.

Receipts from intra-group and advisory services were treated as outside fees for technical services under Article 13 of the India-UK DTAA because the services were confined to managerial, compliance, finance, planning, marketing and transaction-support functions. They did not transfer technical knowledge, skill, know-how or processes to the recipient, so the make available under Article 13(4)(c) was not satisfied. As a result, the amounts were not taxable in India as fees for technical services and the addition was deleted.

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Issues: Whether the receipts from intra-group services and advisory services constituted fees for technical services under Article 13 of the India-UK Double Taxation Avoidance Agreement and were taxable in India in the absence of transfer of technical knowledge, skill, know-how or processes to the recipient.

Analysis: The receipts arising from the intra-group service agreement were held to fall outside the definition of fees for technical services because the services were essentially in the nature of assistance and support in managerial, compliance, finance, planning and marketing functions, and did not satisfy the make available requirement. The advisory services were also found not to transfer technical knowledge, know-how, skill or processes to the recipient; they consisted of identifying potential buyers, preparing presentation material, coordinating marketing activity, and advising on transaction options. As the make available condition under Article 13(4)(c) was not met, the services could not be taxed as fees for technical services under the treaty.

Conclusion: The receipts from both categories of services were not taxable as fees for technical services in India and the addition was deleted in favour of the assessee.

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