ISSUE FOR CONSIDERATION
Section 9 deems certain incomes to have accrued or arisen in India, thereby making a non-resident liable to tax in India on such income. Clauses (vi) and (vii) of section 9(1) deal with the taxability of income by way of royalty and fees for technical services respectively. As per these clauses, royalty and fees for technical services are deemed to have accrued or arisen in India under the following cases:
a) If they are payable by the Government.
b) If they are payable by a person who is a resident. However, if the properties for which the royalty is payable or the services for which fees are payable are utilized by the resident payer for the purposes of his business or profession carried on by him outside India or for the purposes of making or earning any income from any source outside India then this deeming fiction is not applicable.
c) If they are payable by a person who is a non-resident but only when the properties for which the royalty is payable or the services for which fees are payable are utilized by the non-resident payer for the purposes of his business or profession carried on by him in India or for the purposes of making or earning any income from any source in India.
In the case of export sales, residents need to avail various types of services from non-residents, and the corresponding consideration payable for such services may be characterized
