Delhi ITAT upholds
taxation of consideration for providing SAP/CAD software related support
as FTS under Article 13(4)(a), being ancillary and subsidiary to the enjoyment
of the right / property for which royalty was received by assessee (a UK
co., JCBE), clarifies that ‘make available’ clause under Article 13(4)(c) is
not applicable; ITAT notes that in earlier years, assessee had entered into
bilateral agreement under which it used to receive royalty from JCB India
(Indian subsidiary) for licensing the technology with an exclusive right to
manufacture and market, however, during relevant AY, assessee entered into a
Tripartite Agreement whereby the technology was sub-licensed by assessee to JCB
investments, and the royalty paid by JCB India was routed through JCB
Investments; Thus noting that entire royalty amount was passed on to assessee
through JCB Investments less 0.5%, ITAT holds JCB Investments as a pass through
entity, remarks that "Substance will rule over
form", observes that except for this routing of royalty through JCB
Investments, all the terms and conditions of the agreement between the assessee
and JCB India including secondment of assessee's employee to JCB India for
rendering of services; Rejects assessee’s stand that co-ordinate bench ruling
holding JCB India a Service PE of assessee cannot be applied in present facts,
observes that there is no difference in the facts and circumstances except for
the tripartite vs. bilateral arrangement; Further follows co-ordinate bench
ruling to hold that royalty was not effectively connected to PE in India,
therefore, cannot be considered under Article 13(6), but should be taxed as
royalty / FTS under Article 13 itself:ITAT
Subscribe to:
Post Comments (Atom)
Can GST Under RCM Not Charged and Paid from FY 2017-18 to October 2024 be Settled in FY 2024-25?
In a recent and significant update to GST regulations, registered persons in India can now clear unpaid Reverse Charge Mechanism (RCM) liab...
-
Particulars in Part 1 and Part 2 of Step-2 of registration form are required to be exactly the same as reported in the TDS statement. Plea...
-
When India introduced the Goods and Services Tax (GST), it created a big change in the way companies handle their taxes. Earlier, business...
-
In this post, I will discuss Secretarial Standards related to Proxies under SS – 2. Right to Appoint: A Member entitled to attend and ...
-
What is a Digital Signature? Answer: A digital signature authenticates electronic documents in a similar manner a handwritten signatur...
-
Companies often give gifts to their employees to boost morale, celebrate achievements, and promote a positive work environment. Such gifts ...
-
LEASE-DEED (A brief Introduction) Lease defined. A lease of immovable property is a transfer of a right to enjoy such property, mad...
-
Section 150 of the Finance (No. 2) Act, 2024, specifies that taxpayers will not receive refunds for taxes paid or input tax credits (ITC) re...
-
Overview The Supreme Court of India recently ruled on the applicability of the Most Favoured Nation (MFN) clause in tax treaties involvin...
-
This Tax Alert summarizes the recent Delhi High Court (HC) ruling disposing Writ Petitions in a batch matter on valuation of import of serv...
No comments:
Post a Comment