AAR: Cost contributi​on received for business support services by UK group company taxable as FTS

Various business support and advisory services rendered to Shell India by UK group company, held to be ‘technical’ and ‘consultancy’ services; Such services ‘made available’ to Shell India since UK group company worked closely with Shell India’s employees; Shell India was also able to use know-how/intellectual property generated from general business support services independent of the service provider; Income of UK company taxable in India under Article 13 of India-UK DTAA as 'Fees for taxable services'; Reliance on India-US DTAA protocol rejected for India-UK DTAA interpretation; AAR ruling in Perfetti Van Melle Holding B.V . followed: AAR

Recently, AAR in the case of Shell Technology India P. Ltd [TS-760-AAR-2011] held that payment to Dutch group company for Business Support Services was not ‘Fees for Technical Services’ under the India-Netherlands tax treaty. AAR based on the facts had observed that financial business support services provided by Group company did not make available any technical knowledge, skill, knowhow, etc.