18 October 2013
it is relevant to note that ITAT has not specifically discussed exclusion provided under clause (b) of Sec 9(1)(vii) . The clause excludes fees payable in respect of services utilised in a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside India from the definition of technical services. It could be contended that activities of branch would fall under this exclusion and hence, TDS is not applicable. Even practically, it would be very difficult to apply TDS provisions under IT Act to the foreign branches in respect of their overseas operations/ payments.
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