AAR rules that referral fees paid to non-resident are not taxable in India
July 24, 2008
KR Girish and Himanshu Patel, of TP Week.com correspondent KPMG in India, believe the Authority for Advance Rulings was correct to use the narrow definition of fee for technical services under the double tax treaty with Singapore to decide the Cushman & Wakefield case in favour of the taxpayer
The Authority for Advance Rulings (AAR) has recently held, in the case of Cushman & Wakefield (S) Pte Ltd (CWS or the applicant), that the referral fee paid by Cushman & Wakefield India Private Limited (CWI) to CWS is not in taxable in India either under the head business income, or as a royalty income, or as income by way of fee for technical services (FTS) having regard to the provisions of the Income-tax Act, 1961 (the Act) and the provisions of the double taxation avoidance agreement between India and Singapore (DTAA).
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