Payment for use of equipment is taxable as royalty and its related installation activities is taxable as FTS

Global Industries Asia Pacific Pte. Ltd. Vs. DIT (AAR No. 936 of 2010) AAR held that the payment for mobilization and de-mobilization is related to use of equipment for undertaking installation work and taxable as royalty under Article 12(3)(b) of the India-Singapore tax treaty (tax treaty). Further as installation is ancillary and subsidiary to the use of equipment or enjoyment of the right for such use, the payment for installation is taxable as Fees for Technical Services (FTS) under Article 1 2(4)(a) of the tax treaty. The AAR also held that the applicant has provided services or facilitie...