Services of foreign collaborator to Indian Co. - Income Tax - 1334/CBDT

INSTRUCTION NO. 1334/CBDT Dated: May 27, 1980 In the Boards Instruction No.1168 (F.No.458/14/76-FTD) dated 3-5-78 the following may please be substituted for para 3 of the said instructions:- 3. As regards the 3rd point this is essentially a question of fact. If the foreign collaborator is rendering services to the Indian company in India for which the Indian company pays fees or remuneration to the foreign collaborator it could be held that the foreign party is carrying on a business in India. Further if the technician concerned is employed in the said business he would be eligible for exemption u/s.10(6)(viia) provided the other conditions stipulated in the section are satisfied. However where the foreign collaborator does not render any services to the Indian company in India but merely lends the services of its technicians to the Indian company, the foreign enterprise may not be said to be carrying on a business in India.