AAR : US-parent Co's income from authorised Indian reseller for content delivery solutions not taxable

AAR holds that payment received by the Applicant (a US based technology company) from its India based group company under the  non-exclusive Reseller Agreement for sale of applicant's content delivery solutions directly to customers in India, not taxable as FTS/FIS or Royalty under the Act or India-US DTAA; Accepts Applicant’s contention that the Solutions provided by it are in the nature of a 'standard facility' and do not cater to individual requirements of the customer, moreover absent human intervention it cannot be termed as FTS under Explanation 2 to Sec. 9(1)(vii) of the Act, also holds that the Solutions provided do not 'make available​' knowledge to the end user so as to fall under definition of FIS under Article 12 of DTAA; Further holds that “when payments under Reseller Agreement are not towards any IPR/Trademarks, it cannot be covered within the definition of royalty”, also observes that Reseller Services Agreement does not contemplate providing any kind of a software “product” to any of its customers or to the Reseller; Distinguishes Revenue’s reliance on ABB FZ ruling which was rendered in the context of use/sharing of specialized knowledge, expertise, etc. by assessee through its employees, observes in present case there is no use/sharing of knowledge, information, etc. by the Applicant with the Reseller or the end user, likewise distinguishes Revenue’s reliance on ​various of rulings including Samsung-Synopsis ruling, Vodafone South and Verizon rulings on facts; With respect to PE, AAR clarifies that “once we have ruled above that income does not accrue or arise in the hands of the Applicant as Royalty or FTS/FIS…the question of existence of a PE under Article 5 becomes irrelevant and academic, as no income can be attributed to it, if at all there was one.”:AAR