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Recently, the Delhi Bench of the Income-tax Appellate Tribunal (the Tribunal) in the case of POSCO Engineering & Construction Company Ltd. dealt with the taxability of offshore and onshore supply of equipment and services. The Tribunal held that payment for offshore supply of equipment is not taxable in India since title to the goods have been passed outside India on high sea and the payment was also received outside India. The Tribunal observed that the payment for equipment also includes consideration for services like training, test and inspection performed in India. Accordingly, portion of sale price of offshore supply of equipment needs to be attributed to such activities performed in India and shall be taxed in India. Further, the Tribunal held that the payment for design and engineering services is taxable as Fees for Technical Services under Section 9(1)(vii) of the Income-tax Act, 1961.