{"id":422,"date":"2015-09-09T09:15:58","date_gmt":"2015-09-09T09:15:58","guid":{"rendered":"http:\/\/carajput.com\/blog\/?p=422"},"modified":"2021-11-17T12:06:02","modified_gmt":"2021-11-17T06:36:02","slug":"standby-maintenance-charges-fixed-in-nature-received-by-a-nr-is-not-chargeable-as-fees-for-technical-services-within-the-scope-of-section-91vii-taxability-of-fee-for-technical-services-f","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/standby-maintenance-charges-fixed-in-nature-received-by-a-nr-is-not-chargeable-as-fees-for-technical-services-within-the-scope-of-section-91vii-taxability-of-fee-for-technical-services-f\/","title":{"rendered":"tax on fees for technical services"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e4c3157bebd\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e4c3157bebd\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/standby-maintenance-charges-fixed-in-nature-received-by-a-nr-is-not-chargeable-as-fees-for-technical-services-within-the-scope-of-section-91vii-taxability-of-fee-for-technical-services-f\/#STANDBY_MAINTENANCE_CHARGES_FIXED_IN_NATURE_RECEIVED_BY_A_NR_IS_NOT_CHARGEABLE_AS_%E2%80%98FEES_FOR_TECHNICAL_SERVICES%E2%80%98_WITHIN_THE_SCOPE_OF_SECTION_91VII_%E2%80%93_TAX_ABILITY_OF_FEE_FOR_TECHNICAL_SERVICES_FTS\" title=\"STANDBY MAINTENANCE CHARGES (FIXED IN NATURE) RECEIVED BY A NR IS NOT CHARGEABLE AS &#8216;FEES FOR TECHNICAL SERVICES&#8216; WITHIN\u00a0THE SCOPE OF SECTION 9(1)(VII). &#8211; TAX ABILITY OF FEE FOR TECHNICAL SERVICES (FTS)\">STANDBY MAINTENANCE CHARGES (FIXED IN NATURE) RECEIVED BY A NR IS NOT CHARGEABLE AS &#8216;FEES FOR TECHNICAL SERVICES&#8216; WITHIN\u00a0THE SCOPE OF SECTION 9(1)(VII). &#8211; TAX ABILITY OF FEE FOR TECHNICAL SERVICES (FTS)<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/standby-maintenance-charges-fixed-in-nature-received-by-a-nr-is-not-chargeable-as-fees-for-technical-services-within-the-scope-of-section-91vii-taxability-of-fee-for-technical-services-f\/#Flag_Telecom_Group_Ltd_v_DCIT_Mumbai_%E2%80%93_Trib_2015\" title=\"Flag Telecom Group Ltd.\u00a0v.\u00a0DCIT \u00a0(Mumbai &#8211; Trib.)\u00a0[2015] \">Flag Telecom Group Ltd.\u00a0v.\u00a0DCIT \u00a0(Mumbai &#8211; Trib.)\u00a0[2015] <\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/standby-maintenance-charges-fixed-in-nature-received-by-a-nr-is-not-chargeable-as-fees-for-technical-services-within-the-scope-of-section-91vii-taxability-of-fee-for-technical-services-f\/#RULING\" title=\"RULING\">RULING<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/12\/29.png\" rel=\"attachment wp-att-1532\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-1532\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/12\/29-300x159.png\" alt=\"29\" width=\"742\" height=\"393\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/12\/29-300x159.png 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/12\/29-768x406.png 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/12\/29.png 875w\" sizes=\"(max-width: 742px) 100vw, 742px\" \/><\/a><\/p>\n<h2><span class=\"ez-toc-section\" id=\"STANDBY_MAINTENANCE_CHARGES_FIXED_IN_NATURE_RECEIVED_BY_A_NR_IS_NOT_CHARGEABLE_AS_%E2%80%98FEES_FOR_TECHNICAL_SERVICES%E2%80%98_WITHIN_THE_SCOPE_OF_SECTION_91VII_%E2%80%93_TAX_ABILITY_OF_FEE_FOR_TECHNICAL_SERVICES_FTS\"><\/span><span style=\"color: #3366ff;\"><strong>STANDBY MAINTENANCE CHARGES (FIXED IN NATURE) RECEIVED BY A NR IS NOT CHARGEABLE AS &#8216;FEES FOR <a style=\"color: #3366ff;\" href=\"https:\/\/www.caindelhiindia.com\/blog\/membership-fee-paid-to-foreign-association-is-providing-any-technical-services-against-the-fee\/\">TECHNICAL SERVICES<\/a>&#8216; WITHIN\u00a0THE SCOPE OF SECTION 9(1)(VII). &#8211; TAX ABILITY OF FEE FOR TECHNICAL SERVICES (FTS)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>&nbsp;<\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Flag_Telecom_Group_Ltd_v_DCIT_Mumbai_%E2%80%93_Trib_2015\"><\/span><span style=\"color: #ff6600;\"><strong>Flag <\/strong><\/span><span style=\"color: #ff6600;\"><strong>Telecom Group Ltd.\u00a0<em>v.\u00a0<\/em>DCIT \u00a0(Mumbai &#8211; Trib.)\u00a0[2015] <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\"><span style=\"color: #ff6600;\"><strong>FACTS<\/strong><\/span><\/p>\n<p style=\"text-align: justify;\">The assessee had built a high capacity submarine optic fiber telecommunications link cable system and had sold the capacity in the said cable system to various landing parties including VSNL in India under capacity sales agreements.<\/p>\n<p style=\"text-align: justify;\">The Construction and Maintenance Agreement (C&amp;MA) was separately entered between the parties in terms of which the FLAG cable system was to be jointly operated and maintained in efficient working condition along with FLAG and landing parties signatories.<\/p>\n<p style=\"text-align: justify;\">In the year under consideration, the assessee received certain sum from VSNL on account of provision of standby maintenance activities. ]<\/p>\n<p style=\"text-align: justify;\">The Assessing Officer held that receipts from standby maintenance services\/charges were in the nature of &#8216;fees for technical services&#8217; within the meaning of section 9(1)(vii) and, hence, it was to be taxed accordingly in India.<\/p>\n<p style=\"text-align: justify;\">On appeal, the Commissioner (Appeals) upheld the order of the Assessing Officer.<\/p>\n<h4 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"RULING\"><\/span><span style=\"color: #ff6600;\"><strong>RULING<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p style=\"text-align: justify;\">It is not in dispute that the standby charge is a fixed annual charge, which is payable not for providing or rendering services\u00a0<em>albeit\u00a0<\/em>for arranging standby maintenance arrangement, which is required for a situation whenever some repair work in undersea cable or terrestrial cable is actually required to be performed or rendered.<\/p>\n<p style=\"text-align: justify;\">It is a facility or infrastructure maintained for ready to use for rendering the technical services or for repairing services, if required.<\/p>\n<p style=\"text-align: justify;\">There is no actual rendering of the services\u00a0<em>qua\u00a0<\/em>the standby maintenance charges. It is not the case of the Assessing Officer or the Commissioner (Appeals) that standby maintenance charge is on account of actual repair or maintenance carried out by the assessee.<\/p>\n<p style=\"text-align: justify;\">Hence, following the earlier years&#8217; precedence, the receipt on account of standby maintenance charges is not chargeable as &#8216;fees for technical services&#8217; within\u00a0the scope of section 9(1)(vii).<\/p>\n<p style=\"text-align: justify;\">The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional\u00a0endeavors. For query or help, contact:\u00a0<a href=\"mailto:singh@carajput.com\">singh@carajput.com<\/a>\u00a0or call at 9555555480<\/p>\n","protected":false},"excerpt":{"rendered":"<p>STANDBY MAINTENANCE CHARGES (FIXED IN NATURE) RECEIVED BY A NR IS NOT CHARGEABLE AS &#8216;FEES FOR TECHNICAL SERVICES&#8216; WITHIN\u00a0THE SCOPE OF SECTION 9(1)(VII). &#8211; TAX ABILITY OF FEE FOR TECHNICAL SERVICES (FTS) &nbsp; Flag Telecom Group Ltd.\u00a0v.\u00a0DCIT \u00a0(Mumbai &#8211; Trib.)\u00a0[2015] FACTS The assessee had built a high capacity submarine optic fiber telecommunications link cable system &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[3236,3232,2086],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/422"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=422"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/422\/revisions"}],"predecessor-version":[{"id":18969,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/422\/revisions\/18969"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=422"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=422"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=422"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}