Fees for Technical Tax rates

The Mumbai Bench of the Income Tax Appellate Tribunal has held that a non-resident assessee is entitled to the concessional tax rate of 10% under Section 115A(1)(b) on Fees for Technical Services (FTS), notwithstanding the higher 15% rate prescribed under the India-USA DTAA. 

The Tribunal ruled that where RBI regulations permit remittances under the automatic route without requiring prior approval, the absence of a separate Central Government approval cannot defeat the benefit of the concessional domestic tax rate.