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ITAT rulings on ONGC have implications for service providers
Apr 04: Recent ITAT ruling concerning ONGC would have interesting implications for those contractors providing services in the oil & gas sector;
8The Delhi ITAT in a recent case involving benefit of services provided by an assessee, a Dutch company, through which ONGC did not gain any technical knowledge, experience or skill which would enable it to undertake such an endeavour independently in future without aid and assistance of assessee, the payment made to assessee for such services would not fall within scope of article 12 of DTAA between India and Netherlands and would not be taxable in India
8Then again, payment received by an assessee, an American company, from ONGC for blowout control services intended to bring under control a situation where there is an uncontrolled flow of crude oil/natural gas from oil or gas well after pressure control systems have failed would be taxable under section 44BB
8Also, the amount received by a Russian company from ONGC for services in connection with Underground Coal Gasification (UCG) which is a process to convert underground coal/lignite into combustible gases by classifying coal insitu would be taxable under section 44BB
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