TaxTMI 
TaxTMI 
2010 (3) TMI 114
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.... from the Indian company; (ii) referral services where the applicant would refer potential Indian clients to a third party based in India (likely to be another Indian-based recruitment agency) for which the payment will be received by applicant from the third party in India. 2. Broadly, it is the contention of the applicant that the payments received in respect of these services are not chargeable to tax in India as it has no permanent establishment in India and moreover, as per the India-UK Tax treaty (DTAA), the provision relating to 'fees for technical services' is not attracted. Therefore, it is submitted that while making payments to the applicant, the Indian clients are not obliged under law to withhold the tax at source. 3. The....
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....ian based recruitment company. The Indian based recruitment company will be providing the recruitment services to the Indian clients and placing the candidates with the clients. The Indian based recruitment company will get a fee for recruitment services from its Indian clients which were referred to the Indian based recruitment company by Real Resourcing." 6. The applicant has relied on the ruling of this Authority in Cushman & Wakefield Ltd. [305 ITR 208] 7. In response to the additional information furnished by the applicant, the Commissioner has stated that as per the information downloaded from the internet, it appears that Real Resourcing Ltd. is having an office at Nehru Place, New Delhi which is indicative of the pre....
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....dge, experience, skill know-how or processes, or consist of the development and transfer of a technical plan or technical design." . 9. Though the Commissioner, in his comments has attempted to bring the income in question within the scope of cl.(a) & (c) of Art. 13.4, we do not think that they have any application. The contention that the applicant will be rendering consultancy services which are ancillary and subsidiary to the application of a right or information of the nature described in Paragraph 3(a) of Art.13 is untenable. The said paragraph contains the definition of royalty. It reads: "payments of any kind received as a consideration for the use of, or the right to use, any copyright of a literary, artistic or scientific wor....
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....c, Intertek Testing etc. The test applied in the MOU to the US-India Tax Treaty concerning FTS has been approvingly referred to. The relevant paragraph of the MOU clarifies the position thus: "This category is narrower than the category described in paragraph 4(a) because it excludes any service that does not make technology available to the person acquiring the service. Generally speaking, technology will be considered "made available" when the person acquiring the service is enabled to apply the technology. The fact that the provision of the service may require technical input by the person providing the service does not per se mean that technical knowledge, skills, etc., are made available to the person purchasing the service, within ....
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....utilizing the services. Thus, in the instant case, the "know how" or the technical knowledge or commercial experiences, etc., cannot be said to have been "made available" to the Indian company (CWI) merely by reason of customer referral. Consequently, it emerges that the referral fee paid by the Indian company is not FTS as per the phraseology "make available" used in article 12(4)(b) of the Treaty." 13. If the payments received by the applicant are not in the nature of royalty or FTS then, they can be subjected to Indian income tax in terms of Art.7 of the Tax Treaty only if the income results from a business activity carried on through a permanent establishment situated in India. The term 'permanent establishment' (PE) has been defined....