In Brief
A.P. Moller Maersk A.S., a Danish shipping company, received payments from its Indian agents (logistics firms) for use of the Maersk Net global telecommunication system. India's tax authority claimed these payments were taxable fees for technical services under the Indo-Danish tax treaty at 20%. The Supreme Court held the payments were not fees for technical services but cost-sharing reimbursements for maintaining an automated system integral to the shipping business. Technical services require special, customised assistance to particular users; a facility offered equally to all agents does not qualify. The Court dismissed the Revenue's appeals, affirming that reimbursements for system maintenance costs cannot be taxed as income.
The lawyer headnote and full judgment text are available to registered users.