Treaty between India and Netherlands – Indian decision on taxability of payments for data collection and preparing reports

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) delivered a ruling dated 2 February 2007 (published recently) in the case of ITO v. De Beers India Minerals Pvt. Ltd. (2007-TIOL-423-ITAT-BANG) holding that the payment made to a Netherlands based entity for collecting data and preparing reports, would not be taxable in India as fees for technical services (FTS) under India-Netherlands tax treaty (the Tax Treaty).

(a) Facts. The Taxpayer (i.e. De B…