Fee for technical testing services - Taxability - Services performed offshore

Sale of designs and drawings from offshore as part of plant and machinery/process - Taxability

Facts:

Assessee a Finnish non-resident was recipient of Technical testing services and consideration for sale of designs and drawings which were part of plant and machinery processes. Plea of the assessee was the technical testing and sale of designs and drawings both were done offshore, thus was not taxable. On designs and drawings additional plea was; they were akin to sale of a copyrighted article from offshore thus like import of goods hence outside tax ambit in the absence of PE. DRP refused to concur with the stand of assessee. On appeal -

Held against the assessee that the income from technical testing fees though performed from overseas arose in India hence taxable.

Held in favour of the assessee that the sale of designs and drawings were akin to copyrighted article thus in the absence of a PE are not taxable in India.

Ed. Note: Point on technical testing is pending before Kolkata HC as appeal by the assessee. On designs and drawings it appears that revenue has not gone in higher appeal.

Case: Outotec (Finland) OY v. Dy. CIT 2023 TaxPub(DT) 1542 (Kol-Trib)