{"id":57298,"date":"2025-10-28T19:16:57","date_gmt":"2025-10-28T13:46:57","guid":{"rendered":"https:\/\/itatonline.org\/digest\/solvay-s-a-v-dcit-intl-tax-mumtrib-www-itatonline-org\/"},"modified":"2025-10-28T19:16:57","modified_gmt":"2025-10-28T13:46:57","slug":"solvay-s-a-v-dcit-intl-tax-mumtrib-www-itatonline-org","status":"publish","type":"post","link":"https:\/\/itatonline.org\/digest\/solvay-s-a-v-dcit-intl-tax-mumtrib-www-itatonline-org\/","title":{"rendered":"Solvay S.A. v. DCIT (Intl. Tax), (Mum)(Trib) www.itatonline.org"},"content":{"rendered":"<p>The assessee, Solvay S.A. (Belgium), received Rs.109.72 crore from its Indian affiliates, Solvay Specialties India Pvt. Ltd. and Sunshine Chemicals, towards centralized functional support services rendered under a Functional Service Agreement. The Assessing Officer held the receipts taxable as \u201croyalty\u201d u\/s 9(1)(vi) and under Art.12(3)(a) of the India\u2013Belgium DTAA, while the DRP alternatively treated them as \u201cfees for technical services\u201d under S..9(1)(vii) and Art.12(3)(b), holding that the services were managerial, technical, and consultancy in nature. The Tribunal observed that the services rendered \u00a0relating to IT, procurement, shared business, HR, finance, communication, legal, industrial and other administrative support were routine, standardized, and provided to group entities on a global scale to ensure operational uniformity and efficiency. They did not involve any control or management of the Indian entities\u2019 business, nor any human interface imparting technical expertise or specialized advice. Referring to GVK Industries Ltd. v. ITO (2015) 371 ITR 453)(SC), DIT (IT ) v. Panalfa Autoelektrik Ltd. (2014) 227 Taxman 351)(Delhi)(HC), \u00a0\u00a0Springer Verlag GmbH v. DCIT (2022) 197 ITD 173 ( Delhi ) ( Trib) \u00a0and the OECD e-commerce report (2001), the Tribunal held that \u201cmanagerial services\u201d require control of management, \u201ctechnical services\u201d require application of specialized knowledge in a technical field, and \u201cconsultancy services\u201d require human interface and advice. The centralized group services were merely support and coordination functions without these characteristics. Applying the rule of consistency as similar receipts were accepted in earlier years, the Tribunal held that the payments could not be characterized as FTS under Art.12(3)(b) of the India\u2013Belgium DTAA or u\/s 9(1)(vii). Accordingly, the addition was deleted.<strong> (<\/strong>AY. 2022\u201323) ( ITA No. 2071\/Mum\/2025, dated 27.10.2025 )<\/p>\n","protected":false},"excerpt":{"rendered":"<p>S. 9(1)(vii) : Income deemed to accrue or arise in India \u2013 Fees for technical services (FTS) \u2013 Functional Service Agreement \u2013 Standardized support services \u2013 No managerial, technical or consultancy element \u2013 Not taxable as FTS- DTAA &#8211;  India\u2013Belgium .  [S.9(1)(vi)), Art. 12(3)(a), 12(3)(b)]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-57298","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-eUa","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/57298","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=57298"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/57298\/revisions"}],"predecessor-version":[{"id":57299,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/57298\/revisions\/57299"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=57298"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=57298"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=57298"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}