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TMI Blog2014 (5) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... lying upon Perfetti Van Melle Holding B.V.[ 2011 (12) TMI 17 - AUTHORITY FOR ADVANCE RULINGS] - A Protocol cannot be treated as the same with the provisions contained in the treaty itself, though it may be an integral part of the Treaty - Tax Treaties are between two sovereign nations and every country has a particular relation with another countries and same treatment are not given to all the countries - ordinary meaning of the Treaties should be given while interpreting the provision of the Tax Treaties and even to the extent of liberal interpretation of the Treaty, any clause cannot be imported like ‘make available’ in the Treaty that is not there so as to change tax complexion of the Treaty provision. The services being accepted as technical services under the Act and the Tax Treaty, the payment for the services will be covered by ‘fees for technical services’ chargeable under the Act - The submission of the applicant that the services being managerial which was omitted in the definition of fees for technical services in the revised DTAA between India – UK entered into in the year 1993, the managerial services rendered by the applicant will also automatically be omitted in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permanent establishment in India in terms of the provisions of Article 5 of the Double Taxation Avoidance Agreement between India and France. 3. The applicant has entered into a Management Services Agreement with Steria France whereby Steria France provides various management services to the Applicant with a view to rationalize and standardize the business conducted by the applicant in India in accordance with the international best practices. As per the terms of the Management Services Agreement (MSA), the services provided to the applicant by Steria France are broadly grouped under :A.General Management, B. Corporate Communications, C. Finance, D. Group Marketing, E.Internal audit, F. Human Resources, G. Information System, H. Controlling and Consolidation, I. Legal, J. Group Global Operations, K. Group Efficiency, L. Group Information Services, M. People One and N. Management Information Services. The services, as referred above, are provided by Steria France through telephone, fax, e-mail etc. and no personnel of Steria France would visit India for provision of such services. 4. The relationship between Steria India and Steria France is that of independent contractors and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Steria France under the Management Services Agreement? 7. It is submitted that Steria France being a non-resident in India and tax resident of France, is entitled to be governed by the provisions of India-France Double Taxation Avoidance Agreement as per provision of Section 90(2) of the Act, to the extent they are more beneficial as compared to the provisions of the Act. The main thrust of the argument of the learned counsel for the applicant is that the make available clause is not satisfied in the case and hence the services will not fall under the technical services as per the India-France Treaty. It was stated that though there is no make available clause in the India-France Treaty, the make available clause in the India-UK DTAA, which was signed much after 1st September, 1989, is applicable in the India-France DTAA by virtue of the protocol signed between India and France. The restricted scope of FTS in the India-UK DTAA will, therefore, be applicable in the applicant s case. In absence of such make available of the technical knowledge, experience, skill, know-how or processes, the services rendered by Steria France will not fall under the definition of technical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rendered to the applicant by Steria France, being managerial in nature, would have been liable to tax in India . 10. Relevant portion of the Protocol to the Tax Treaty between Indian and France on the basis of which the learned counsel made his arguments reads as under:- 7. In respect of Article 11 (Dividends), 12 (Interest) and 13(Royalties, fees for technical services and payments for the use of equipment), if under any Convention, Agreement or Protocol signed after 1-9-1989, between India and a third State which is a member of the OECD, India limits its taxation at source on dividends, interest, royalties, fees for technical services or payments for the use of equipment to a rate lower or a scope more restricted than the rate of scope provided for in this Convention on the said items of income, the same rate or scope as provided for in that Convention, Agreement or Protocol on the said items income shall also apply under this Convention, with effect from the date on which the present Convention or the relevant Indian Convention, Agreement or Protocol enters into force, whichever enters into force later. 11. In the case of Perfetti Van Melle Holding B.V. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Convention on the said items of income, the same rate or scope as provided for in that Convention, agreement or Protocol . 13. What is stated by the Protocol is for India to limit its taxation at source for the detail items mentioned therein. The restrictions are on the rates and make available clause cannot be read in the items. On the basis of the Protocol, notification No.9602 [F.No.501/16/80-FTD], dated 6.9.1994 as amended by Notification No. SO 650(E), dated 10.7.2000. was issued by Govt. of India. The said Notification does not include anything about the make available provision. Had the intention of the Protocol or the Government is to include make available clause in the Tax Treaty between India and France, it should have been done so in the said Notification. We have taken note of the Notification issued in the case of India Netherland Tax Treaty whereby the Protocol was given effect to. The changes in the Treaty on the basis of the Protocol were given effect by Notification only. We do not see any reason as to why different treatment will be given in the present case. Tax Treaties are between two sovereign nations and every country has a particular relatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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