AAR held that Front-end fee payable by a customer in India, for appraisal of loan application carried out outside India, under financing arrangement with Applicant is not taxable as income from ‘interest’ and said fee is also not taxable as fee for technical services (FTS) under as they do not pass ‘make available’ test.
Societe De Promotion Et De Participation Pour La Cooperation Economique, In re (2018) 256 Taxman 129//166 DTR 361 / 303 CTR 144 (AAR )
S. 9(1)(i): Income deemed to accrue or arise in India – Business connection -Front-end fee payable by a customer in India, for appraisal of loan application carried out outside India, under financing arrangement with Applicant is not taxable as income from ‘interest’ and said fee is also not taxable as fee for technical services (FTS) under as they do not pass ‘make available’ test- Not liable to deduct tax at source – DTAA India- France [S.195 , Art 12 , 13 ]