Reimbursement of Salaries to Seconded Employees Does Not Constitute FTS

DCIT Vs Flipkart Internet Pvt Ltd. (Karnataka High Court) Karnataka High Court, in DCIT vs. Flipkart Internet Pvt. Ltd., dismissed the Revenue’s appeal challenging the Single Judge’s order granting Flipkart a ‘Nil Tax Deduction at Source’ certificate under Section 195(2) of the Income Tax Act, 1961. The case revolved around taxability of payments made by Flipkart to its foreign parent entity, Walmart Inc., for seconded employees. The Revenue argued that these payments qualified as Fees for Technical Services (FTS) under Section 9(1)(vii) of the Act and the India-US DTAA, while ...