This Tribunal decisions deals with issue as to whether rendering on call advisory services in the nature of troubleshooting, isolating problem and diagnosing related trouble and repair services remotely, will satisfy make available condition under India USA DTAA.


 Taxpayer is an Indian company and was engaged in the business of providing Annual Maintenance Contract (‘AMC’) services and installation, commissioning services for equipment supplied by its associated enterprises (“AEs”) to customers in India.

 The Taxpayer entered into an agreement with its US AE, whereunder the US AE was required to provide remote on-call support services and emergency technical support services to facilitate the Taxpayer in rendering maintenance and repair services with respect to equipment supplied to the customers in India. The US AE rendered the services remotely from outside India. In some cases, the equipment supplied to the customers in India was also shipped to the US by the Taxpayer for undertaking repairs by the US AE.

Taxpayer contended that the services rendered by US AE did not make available any technical knowledge or skill.  Further, as the services were rendered outside India, there was no PE of the US AE in India and hence the payment made to US AE was not taxable in India.  However, AO held that the services rendered by non-resident AE made available technical knowledge, experience or skill and hence qualified as FTS under the India US DTAA. 


The ITAT held that Services provided by AE to Taxpayer involved provision of assistance in troubleshooting, isolating the problem and diagnosing related trouble and alarms and equipment repair services. The ITAT observed that these services were provided remotely outside India and no on-site support services were rendered in India.  The ITAT concluded that although, the technical knowledge or skill was used by the US AE for rendering of the services, it did not make available any technical knowledge or skill to the Taxpayer.  Thus, the Taxpayer was not liable to deduct TDS on same.

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