Stay abreast with the latest developments in the professional domain along with in-depth analysis through the monthly BCA Journal. Get access to an engaging library of researched publications from the BCAS stable.
Learn MoreLorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book.
Learn MoreLorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book.
Learn MoreA voluntary organisation established on 6th July 1949, BCAS has presently more than 9,000 members from all over the country. BCAS is a principle-centered and learning-oriented organisation promoting quality service and excellence in the profession of Chartered Accountancy.
Learn MoreLorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book.
Learn MoreLorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book.
Learn More
Yash Raj Films (taxpayer) is engaged in the business of production of films, the shooting of which is often done outside India. During the relevant previous year, the taxpayer made payments to overseas service providers (OSPs) for the services availed in connection with the shooting of different films which mainly included arranging for extras, security, locations, accommodation of cast and crew, necessary permissions from local authorities, makeup of the stars, insurance cover, shipping and custom clearances, obtaining visas. The tax authority considered the payments for obtaining the above services to be in the nature of fees for technical services (FTS) and considered the taxpayer as an assessee-in-default for not withholding taxes.
Held:
Considering the nature of the services rendered by OSPs to the taxpayer as spelt out in the relevant agreements, the said services cannot be treated as technical services within the meaning given in Explanation 2 to section 9(1)(vii).
The said services rendered outside India by the OSPs in connection with making logistic arrangement are in the nature of ‘commercial services’ and the amount received by them from the taxpayer for such services constitutes their business profit which is not chargeable to tax in India in the absence of any Permanent Establishment (PE) in India of the said service providers. The taxpayer, therefore, is not liable to withhold taxes on the payments made.