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Fee earned from service agreement which was separate from license agreement not taxable as royalty or FTS

August 20, 2019[2019] 108 47 (Mumbai)

INTERNATIONAL TAXATION : Where assessee - Dutch company had entered into two agreements with its Indian subsidiary, namely, License Agreement granting rights to use software owned by it and Service Agreement to provide executive search services, since executive search fee earned by assessee in terms of Service Agreement was independent of royalty earned in terms of License Agreement, same was not taxable in India as FTS or royalty under article 12(5)(a) of DTAA

INTERNATIONAL TAXATION : Payments towards reimbursement of expenses towards travel and stay, video conferencing charges, insurance, and other miscellaneous expenses, received by assessee-Netherland based company from its Indian subsidiary, would not constitute FTS as per article 12 of India Netherland DTAA

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