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Tax Publishers Decore Exxoils (P) Ltd. v. ITO [ITA Nos. 196 & 197/Ind/2018, dt. 20-10-2020] : 2020 TaxPub(DT) 4405 (Indore-Trib) Payments for subscription of manuals, flight training, route navigation, parts and service bulletins to non-residents -- Whether subject to TDS under section 195 *Facts:* Assessee was a non-scheduled flight licence operator to operate Lear jet aircrafts. They had to make payment to overseas (USA) for the following -- 1. Subscription charges for instrument flight rules (IFR) to Germany. 2. Payments were made for subscribing to route navigation manuals. 3. As part of the DGCA commitment to maintain/upgrade trained pilots assessee had to make payments to USA for flight simulator training modules. 4. Service and spare parts bulletins were also availed from suppliers along with purchase of parts where in the service parts bulletins was offered as a separate service. It was the case of the revenue that all of the above payment would be subject to TDS under section 195 of the Indo-German/Indo-US DTAA and since assessee had not done TDS they were held to be in default. On higher appeal - Held in favour of the assessee that the said payments were not subject to TDS under the Indo-German DTAA and under Indo-US DTAA. They were not fee for technical services or royalties under German DTAA warranting human intervention and were merely standard subscriptions thus not falling in the definition warranting a TDS. As for Indo-US DTAA they did not bring forth any specific technical services/royalties which make available the technology/skill to furtherance in the business of the assessee. Hence no TDS was warranted on the same.

Tax Publishers

Decore Exxoils (P) Ltd. v. ITO [ITA Nos. 196 & 197/Ind/2018, dt. 20-10-2020] : 2020 TaxPub(DT) 4405 (Indore-Trib)

Payments for subscription of manuals, flight training, route navigation, parts and service bulletins to non-residents -- Whether subject to TDS under section 195

Facts:

Assessee was a non-scheduled flight licence operator to operate Lear jet aircrafts. They had to make payment to overseas (USA) for the following --

1. Subscription charges for instrument flight rules (IFR) to Germany.

2. Payments were made for subscribing to route navigation manuals.

3. As part of the DGCA commitment to maintain/upgrade trained pilots assessee had to make payments to USA for flight simulator training modules.

4. Service and spare parts bulletins were also availed from suppliers along with purchase of parts where in the service parts bulletins was offered as a separate service.

It was the case of the revenue that all of the above payment would be subject to TDS under section 195 of the Indo-German/Indo-US DTAA and since assessee had not done TDS they were held to be in default. On higher appeal -

Held in favour of the assessee that the said payments were not subject to TDS under the Indo-German DTAA and under Indo-US DTAA. They were not fee for technical services or royalties under German DTAA warranting human intervention and were merely standard subscriptions thus not falling in the definition warranting a TDS.

As for Indo-US DTAA they did not bring forth any specific technical services/royalties which make available the technology/skill to furtherance in the business of the assessee. Hence no TDS was warranted on the same.