By Geeta Jani, Dhishat B. Mehta, Chartered Accountants
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Section 9, Article 12, 5 of India Singapore DTAA. Provision of high quality education FTS – However exemption under Article 12 available to Singapore educational institution – on facts no PE and sum not chargeable to tax in India.
Facts:
The applicant was an Indian company in the business of providing high quality executive education programs. The applicant entered into agreement with a Singapore company (“SingCo”), which was in the business of providing management education programmes globally. As per the Agreement, SingCo was to conduct teaching intervention at SingCo’s global campuses in Singapore/France/ India and through telepresence in Singapore,while the applicant was to assist in marketing, organising, managing and facilitating. The programme was to be for 11 months and teaching intervention by SingCo was to be for 30 days comprising in-class teaching at Singapore and at French campuses of SingCo (16 days), in-class teaching by SingCo faculty in India (6 days) and teaching through tele-presence in Singapore (8 days). The applicant was to compensate SingCo for the cost and other incidental expenses.
Held:
(i) The services to be rendered by SingCo involved expertise in, or possession of, special technical skill or knowledge. Hence, the payment will be FTS, both under the Act and under India- Singapore DTAA. However, since there is no dispute that SingCo is an educational institution, the payment will be covered by the exclusion in Article 12(5)(c) of India-Singapore DTAA.
(ii) On facts, SingCo will not have PE in India under Article 5(1) or 5(8) of India-Singapore DTAA.
(iii) Accordingly the amount is not chargeable to tax in India.
