P.V. Reddi, Chairman - The applicant is a company incorporated in the Netherlands. It is engaged in the business of supplying special purpose computer software to be used in the exploration and production of mineral oils. The applicant describes it as off-the-shelf software in the sense that the software is not prepared to suit the special requirements of a customer on the basis of the order placed by the customer. The details of the software supplied are furnished at page 4 of the application. We may refer to few of them :

1.Geoframe Run Time which is the entry point for geologists wanting to run various geoframe modules.

2.Geoframe Data Monitor which is used to access the functions and utilities for seismic map and interpretation functions.

3.ISEX suit with all functionalities. It is described as a geoframe seismic interpretation module.

4.ASAP (Automatic Surface Air Picking) which allows the tracking of one or more events within a seismic volume.

5.Variance Cube which highlights the faults and subtle stratigraphic features from seismic volumes.

1.1 The applicant has stated that the software was sent by air. The airway bill mentions ONGC to be the consignee of the software packages and the Bill of Entry shows the importer as ONGC. Under the terms of the agreement, namely, Software Licence Terms and Conditions, "Customer shall own and have title to the tangible media in which the software is delivered. Title to the media shall pass to customer in the country of origin". The consideration for such off-shore supplies of software was received by the applicant outside India in US dollars.

1.2 The applicant was awarded the contract by ONGC to supply the said software under the Letter of Award dated 31-8-2007. This purchase order was issued by ONGC after the price negotiation. The first item in the purchase order is the supply of Geoquest software licence. The cost is specified as US $ 951,818. The second item is the installation and commissioning of the software. It is mentioned that this work will be carried out by Schlumberger Solutions Pvt. Ltd. (SSPL) which is an affiliate entity of the applicant. The total cost thereof including service tax is 11,224 US dollars. The said amount had to be paid by ONGC directly to SSPL after successful installation and commissioning. The third item is training and post warranty Annual Maintenance Contract (AMC). It will have to be provided by SSPL on behalf of the applicant. It has been clarified by the applicant vide its written submissions dated 9-7-2010 that no AMC was awarded by ONGC to the applicant or SSPL in pursuance of the contract under consideration. However, a centralized AMC was entered into between ONGC and SSPL for 3 years for maintenance, support and upgradation of various software applications. Here, it needs to be mentioned that as per the original bid document, the applicant quoted the cost of installation and commissioning and training charges on the premise that all these works would be carried out by the applicant itself. The training charges stipulated was US $ 125,000 for 50 days.

1.3 The applicant has filed a copy of the contract between ONGC and SSPL to establish that the training part has been delinked from the applicant's scope of work and entrusted to SSPL. The contract contemplates rendering services in the nature of upgradation, maintenance and support of the software, which covers not only the software supplied by the applicant but also other types of software.

1.4 The ONGC made an application to the Asstt. Director (Intl. Taxation), Dehradun, in December, 2007 for passing appropriate orders on the withholding of tax. The ADIT passed a provisional order on 6-2-2008 to retain 10 per cent of the contract value and remit the balance to the applicant.

2. The following questions are framed by the applicant for seeking advance ruling :