Payroll and other management services whether make available any technology to fall in the scope of Article 12(4) of Indo-US DTAA

Facts :

Assessee a US company was in receipt of certain management and HR services from its Indian entities. Case of the revenue was these were taxable as Fee for included services under the Indo-US DTAA Article 12(4). Plea of the assessee was that these did not make available any technology for exploitation besides the same being on cost thus not taxable. On appeal -

Held in favour of the assessee that the services did not make available any technology to fall in the realm of included services of the DTAA. They were also held to be at cost as per the group transfer pricing manual of the assessee manifested.

Ed. Note: The tabulation given in the judgment and the cost allocation logic acceptance needs to be noted. Most robust group TP regulations/manuals have these well documented similarly. To prove that these were at costs; how far does an assessee needs to travel is something left on case to case basis.

Case: Kennametal Inc. v. Dy. CIT 2023 TaxPub(DT) 2279 (Bang-Trib)