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07 April 2016

India's Supreme Court rules that payment to stock exchange for online trading facility does not constitute fees for technical services

In the case of Kotak Securities Ltd. (Taxpayer), India's Supreme Court (SC) has ruled that services rendered by the Bombay Stock Exchange (BSE) were not technical services as they did not satisfy the test of specialized, exclusive or the individual requirement of members. The SC held that services rendered by the BSE were similar to a facility provided for transacting a business rather than a technical service; accordingly, the transaction charges paid to the BSE do not constitute fees for technical services (FTS) and therefore are not subject to withholding tax under the Indian Tax Laws.

A Tax Alert prepared by EY's Global Tax Desk Network, and attached below, provides additional details.

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Document ID: 2016-0636

 

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