E-journal Subscription Amount Not Taxable as Royalty: Delhi High Court

 The Delhi High Court declared that the subscription amount earned by a non-resident taxpayer from Indian entities is not taxable as royalty or fee for technical services. Let's dive into the details! 🕵️‍♂️🔍

The Case: A Germany-based taxpayer engaged in publishing books and academic e-journals received subscription fees from Indian entities. The taxpayer contested the taxability of this income, while the tax officer classified it as royalty.

The High Court's Verdict: The Delhi High Court closely examined the nature of the transaction and found that the taxpayer merely sold copyrighted material to the entities without granting any right to copy the material. Consequently, the subscription amount could not be treated as royalty or fee for technical services.

Key Takeaways: The Court's ruling aligned with the Supreme Court's decision in the Engineering Analysis case, reinforcing the distinction between selling copyrighted material and granting copyright ownership.

Food for Thought: With this verdict in place, one might question whether the 2% equalization levy is applicable to subscription fees in the current scenario. 🤔💡