Advance Ruling on taxability of an Australian company for providing basic engineering services to an Indian company under an agreement

SUMMARY OF CASE LAW  The services rendered and the work undertaken by the applicant-Australia n company in terms of the Agreement for Basic Engineering and Procurement services fall within the scope of `royalties’ as defined in Article XII(3) of the DTAA between India and Australia and the receipts are taxable in India by virtue of Article XII(2); under the Income-tax Act too, they are so taxable; the exclusion clause under Article XII (4) of the DTAA is not attracted in view of the absence of the effective connection between PE and the services, and therefore, the royalty income is lia...