The Guiding Factor as
to the taxability under the head ‘Salaries’ Vs ‘Fees For Technical Services’ –
Expatriate Taxation Regarding:
The question is whether
the services rendered by the overseas entity will be taxable under Fees For
Technical Services in the hands of the overseas entity or whether they are
taxable as ‘Salaries’ in the hands of the non-resident employees?
Held
that, where the Indian entity only had the right to terminate the secondment,
without the right to terminate the original employment, overseas entity was the
real employer of seconded employees. Reimbursement of salary was to be regarded
as FTS [Fees for Technical Services] as they rendered quality control services
till the necessary skills were acquired by the resident employee group. [Centrica India Offshore P Ltd Vs CIT]
[2014] [44 Taxmann.com 300] [Delhi]
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