Case nº A.A.R. Nos. 1055 of 2011 of Authority for Advance Rulings, May 02, 2014 (case Steria (India) Limited. Vs Mr. Manoj Kumar Mahar)

JudgeFor Appellant: Mr. G.C. Srivastava, Advocate, Mr. Arun Chhabra, Mr. Saurabh Srivastava, Ms. Nidhi Gupta and Ms. Shradha Mintri, CA
PresidentArijit Pasayat, J. (Chairman) and T.B.C. Rozara Member
Resolution DateMay 02, 2014


  1. The applicant, Steria (India) Ltd. (hereafter referred to as Steria India), is a public limited company registered under the laws of India and is a leading provider of IT driven business services for its client's core business processes. The applicant is regularly assessed to tax as resident in India.

  2. Groupe Steria SCA (hereafter referred to as Steria France), is a partnership firm, incorporated on March 11, 1988 as per the laws of France having its registered office at 12 Rue Paul Dautier-78140 Velizy Villacoublay, France, Registered at Versailles companies trade register with the Number 344 110 655. It centralizes technical skills to carry on management functions such as legal finance, human resources, communication risk control, information systems, controlling and consolidation, delivery and industrialization, technology and the management information services etc. Steria France, for the purpose of the Act, is a non resident in India (as control and management of its affairs is situated wholly outside of India) and tax resident of France. Steria France does not have any office, presence or personnel based in India so as to constitute a permanent establishment in India in terms of the provisions of Article 5 of the Double Taxation Avoidance Agreement between India and France.

  3. The applicant has entered into a Management Services Agreement with Steria France whereby Steria France provides various management services to the Applicant with a view to rationalize and standardize the business conducted by the applicant in India in accordance with the international best practices. As per the terms of the Management Services Agreement (MSA), the services provided to the applicant by Steria France are broadly grouped under: A. General Management, B. Corporate Communications, C. Finance, D. Group Marketing, E. Internal audit, F. Human Resources, G. Information System, H. Controlling and Consolidation, I. Legal, J. Group Global Operations, K. Group Efficiency, L. Group Information Services, M. People One and N. Management Information Services. The services, as referred above, are provided by Steria France through telephone, fax, e-mail etc. and no personnel of Steria France would visit India for provision of such services.

  4. The relationship between Steria India and Steria France is that of independent contractors and nothing contained in Management Services Agreement shall:

    1. give either party the power to direct and control the day-to-day activities of the other in any manner; or

    2. constitute the parties as partners, agent, joint ventures, employer and employee, co-owners or otherwise as participants in a joint undertaking.

    Services provided by Steria France are not binding on the Applicant and the Applicant shall have the right to engage any other person to render any services that are similar to or duplicative of the services rendered by Steria, France by virtue of this agreement.

    Only the Applicant is intended to get benefit from these services and such services are procured and utilized by the applicant for its own business purposes and not for the benefit of any of its customers.

  5. Total amount charged by the Steria France from Steria India is based on the total cost incurred by the Steria France in providing these services (as increased by a mark up of 5%) apportioned to various affiliates (group entities) to which such services...

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