Case nº A.A.R. Nos. 1037 of 2011 of Authority for Advance Rulings, September 20, 2013 (case Eruditus Education Private Ltd. Vs DIT International Taxation)

JudgeFor Appellant: Mr. Sandeep Bhalla, Mr. SK Aggarwal, Mr. Gurvinder K. Bawa, and Mr. Shailvi Singhal, CAs and For Respondents: Mr. R.S. Rawal, CIT(DR), AAR and Ms. Ramapriya Raghavan, JDIT-II (Intl.Taxn.)
PresidentArijit Pasayat, J. (Chairman) and T.B.C. Rozara, Member
Resolution DateSeptember 20, 2013

Judgment:

T.B.C. Rozara, Member

  1. The applicant M/s. Eruditus Education Private Limited is a private limited company incorporated and registered in India and is in the business of providing high quality executive education programmes to Indian corporate and other participants. The applicant entered into a Programme Partnership Agreement with Ms. INSEAD, a tax resident company at Singapore which is in the business of providing various management education programmes globally. As per the Programme Partnership Agreement INSEAD is obliged to conduct teaching intervention as per the agreed terms while Eruditus, the applicant, shall assist in the marketing, organizing, managing and facilitating a conduct of the programme. The duration of the programme shall be 11 months and the teaching intervention to be conducted by INSEAD will be for a period of 30 days that will consist of in-class teaching on INSEAD global campuses in Singapore and France, in-class teaching in India and teaching through telepresence in Singapore in the manner set out in the agreement as follows:-

    The applicant shall compensate INSEAD for the cost involved in teaching the entire programme and are the incidental expenses, which will be termed as "INSEAD Cost", the components of which are as under:-

    Upon successful completion of the programme, the Indian participants will be awarded a certificate by INSEAD.

  2. The applicant seeks ruling from the Authority for Advance Rulings on the following questions:-

  3. Whether the payments made by the applicant to INSEAD for various services under the terms of the programme partnership agreement is in the nature of "Fees for Technical Services" within the meaning of the term in Article 12 of the Convention between the Govt. of Republic of India and the Govt. of Republic of Singapore for the Avoidance of Double Taxation and the Convention of fiscal evasion with respect to taxes on income' ("the India-Singapore Tax Treaty") and/or under the provisions of Section 9(1)(vii) of the Income tax Act, 1961?

  4. Whether the recipient in the stated facts and circumstances, would have a Permanent Establishment ("PE") in India under Article 5(1) or 5(8) of the India-Singapore Double Taxation Avoidance Agreement ("Treaty") in relation to the activity of conducting in-class teachings through telepresence in India?

  5. Based on the answers to questions (1) and (2) above and in view of the facts as stated in Annexure 1 whether the payments received by INSEAD...

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