Cost Allocation Services Without Technical Knowledge Transfer Not Taxable as FTS Under DTAA "Make Available" Requirements

ITAT held that services provided under India-Netherlands DTAA did not qualify as Fees for Technical Services (FTS) as the "make available" clause requirements were not satisfied. While cost allocations were deemed taxable due to presence of income element beyond pure reimbursement, the tribunal ruled that the 10% tax rate under Article 12 was inclusive of surcharge and education cess, prohibiting additional levies. The matter of TDS credits, tax calculation accuracy, and refund adjustments was remanded to the Assessing Officer for verification and fresh determination after providing the assessee opportunity of hearing. The tribunal allowed multiple grounds of appeal concerning FTS qualification under the treaty provisions, affirming that mere cost recovery services without technical knowledge transfer did not constitute FTS under the tax treaty framework. .....

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