Income Derived By Foreign Entity For Rendering Technical Assessment Services Doesn't Constitute FTS: Delhi ITAT

The Mumbai ITAT ruled that receipts from inspection services and scanning of offshore pipelines under the sea are not taxable as fees for technical services (FTS) under the India-Singapore DTAA. The tribunal held that the services provided did not involve the transfer of technical knowledge or skills to the recipient, and therefore, the receipts could not be classified as FTS. The ruling emphasized that the services were technical in nature but did not meet the “make available” clause required for FTS classification. This decision provides clarity on the tax treatment of technical services under international tax treaties.