Section 393(2) (Act of 2025) — the law in short
What the courts have decided on section 393(2) (Act of 2025), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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GVK Industries Ltd v ITO
Supreme CourtHelps department
We paid a Swiss adviser a success fee for tying up the loans for our power project. He has no office here and did all the work abroad. Do we still have to deduct before we remit?
Yes, on these facts. The Supreme Court held that the success fee paid to a non-resident consultant for structuring and tying up the finance for an Indian power project was fees for technical services, in the consultancy limb, and that tax should have been deducted, so the no-objection certificate for remittance was rightly refused. Section 9(1)(vii)(b) charges the fee where the payer is a resident and lays down what is known as the source rule - the recipient's income is chargeable in the country where the source of payment is located - and requires the services to be utilised in India. The clause carves out an exception in its latter part, for services utilised in a business or profession carried on outside India or for making or earning income from a source outside India; the Court set that exception out but did not rule on it in terms, deciding the case instead on the definition of fees for technical services.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.
