TaxTMI 
TaxTMI 
2009 (11) TMI 19
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....any and a subsidiary of the applicant and is operating as a construction company involved in general construction and civil engineering. The said Company provides industrial construction and related engineering consultancy services. 2. The applicant had entered into a technical collaboration agreement with SMCI on 10th December 1997. It may be mentioned that the names of the two Companies have undergone a change. As per the Agreement, the applicant had agreed to furnish to SMCI under a license the technical know-how and technical information covering the provision of contract services and assistance for the marketing. It has also granted exclusive right to SMCI to provide contract services in India and non exclusive rights to provide con....
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....eks the ruling of this Authority in respect of the following question:- Whether in the facts and circumstances of the case and in law, the income by way of royalties arising to the applicant in India in terms of Article 12 of the Agreement for avoidance of double taxation and prevention of fiscal evasion between India and Japan should be taxed in terms of the paragraph (2) of the Article as amended by Article III of Protocol dated 24.02.2006 at a rate not exceeding 10% from assessment year 2007-08 onwards? 4. The applicant's counsel has stated in the course of arguments that the reference to the year 2007-2008 is an inadvertent mistake and it ought to be 2008-09. In the written submission filed on dt 17th November 2009, this was again....
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....an employee of a person making payments and to any individual for independent personal services referred to in article 14 in consideration for the services of a managerial, technical or consultancy nature including the provisions of services of technical or other personnel." 6. The figure 10% occurring in paragraph 2 was substituted for 20% in the year 2006, as stated above. Article III of the Protocol reads thus: "Article III. Paragraph 2 of Article 12 of the Convention shall be deleted and replaced by the following : "2. However, such royalties and fees for technical services may also be taxed in the Contracting State in which they arise and according to the laws of that Contracting State, but if the recipient is the beneficia....
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....ion' is that related to "basic design methods and turn-key construction management techniques as also other technical information available for the provision of the contract services as are applicable to the operations of the licensee". Some of the services or part of the assistance rendered may also fall under para 4 of Article XII which deals with "fees for technical services" but it is not necessary to demarcate and pin-point the items which fall within paras 3 & 4 respectively because the rate of taxation is the same. The Revenue has in its comments agreed with the contention of the applicant that the reduced rate of 10% will be applicable, while making it clear that the said rate will be applicable only for the assessment year 2008-09 ....