DELHI HIGH COURT: IT AND ADMIN SERVICES BY SINGAPORE ENTITY TO ITS AFFILIATE IN INDIA CANNOT BE FTS

The Delhi High Court in the case The Commissioner Of Income Tax (International Taxation)-1, Delhi Versus M/S Bio-Rad Laboratories (Singapore) Pte. Ltd. observed and has held that the information technology and the other administrative services which is provided by the respondent or assessee to its affiliate in India could be construed as fees for technical services, FTS.

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The bench comprising of Justice Rajiv Shakdher and Justice Girish Kathpalia in the case observed and has stated that the services which are being offered by the respondent or assessee to its Indian affiliates did not come within the purview of FTS, as it is reflected under Article 12(4)(b) of the Indo-Singapore DTAA and it has been concluded that they did not fulfil the criteria of the “make available” principle.

It has been concluded by the Assessing Officer, AO concluded that the services which are provided by the respondent or assessee to the Indian subsidiary were in the nature of the management support services and hence the same is taxable at the rate of 10% plus surcharge and education cess under the Indo-Singapore DTAA.