Case Law Details
Standard Chartered Global Business Services Pvt. Ltd. Vs DCIT (ITAT Chennai)
ITAT held that payment of Fees for training to Employees on soft skill & general topics cannot be treated as Fees for Technical Services (FTS)
The impugned demand against the assessee stem from the fact that the assessee paid an amount of Rs.141 .75 Lacs to another Singapore based entity i.e., M/s Standard Chartered Bank. The payment was pursuant an agreement whereby the assessee group established a training center in Singapore to impart soft skill training like leadership skills, communication etc. A group wanting to avail the services could recommend the selected employees to undergo the training which is mainly through online portal. This is stated to be general training on soft skill and on general topics like basis of banking etc. which may be useful in general to employees getting training but the same would not have any specific relation to the work being done by them. Accordingly, it was submitted that there was no transfer of technology and the training was not in the nature of transfer of technical skill etc. The ‘make available’ clause as prescribed in Article‑ 12 of India-Singapore Double Taxation Avoidance Agreement (DTAA) would not be satisfied since the services acquired by the recipient should enable him to apply the technology therein which was not the case here. Further, Article-7 provides that business income would be taxable in India only if the payee has permanent establishment (PE) in India. Since the payee does not have any PE in India, there was no obligation of TDS as mandated u/s 195.
The impugned demand against the assessee stem from the fact that the assessee paid an amount of Rs.141 .75 Lacs to another Singapore based entity i.e., M/s Standard Chartered Bank. The payment was pursuant an agreement whereby the assessee group established a training center in Singapore to impart soft skill training like leadership skills, communication etc. A group wanting to avail the services could recommend the selected employees to undergo the training which is mainly through online portal. This is stated to be general training on soft skill and on general topics like basis of banking etc. which may be useful in general to employees getting training but the same would not have any specific relation to the work being done by them. Accordingly, it was submitted that there was no transfer of technology and the training was not in the nature of transfer of technical skill etc. The ‘make available’ clause as prescribed in Article‑ 12 of India-Singapore Double Taxation Avoidance Agreement (DTAA) would not be satisfied since the services acquired by the recipient should enable him to apply the technology therein which was not the case here. Further, Article-7 provides that business income would be taxable in India only if the payee has permanent establishment (PE) in India. Since the payee does not have any PE in India, there was no obligation of TDS as mandated u/s 195.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
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