The Delhi Income Tax Appellate Tribunal recently issued a decision on whether payments for equipment maintenance services provided outside India are subject to withholding tax. The case involved India-based HCL Comnet Ltd. (HCL), a provider of network solutions and services for related equipment. In the 2003-04 fiscal year, HCL made payments to an Israeli company for routine repairs, replacement, and maintenance services for equipment that was sent outside India and then returned after the work was completed. HCL withheld no tax on the payments, and in its tax return for the year, claimed the payments as a deductible expense. However,...