In a large number of cases, foreign companies provide engineering data and drawings to Indian companies. Sometimes the supply of the technical data is also coupled with some ancillary and subsidiary services, which may or may not be inextricably linked to the sale.
In such situations, a question arises whether the consideration received by the foreign company is liable to tax in India or not. The income-tax department generally takes a view that the supply of technical drawings, designs and data is in the nature of provisions of technical services or for the use of engineering drawings. In both situations, the consideration is liable to be taxed in India as
