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
Subscribe to:
Post Comments (Atom)
Requirement to dematerialize shares of private limited companies
The Ministry of Corporate Affairs in October 2023 had mandated private companies and their shareholders to dematerialize their shareholding...
-
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...
-
1. Introduction: Every trust/charitable society/ NGO that wishes to claim the tax exemption benefits has to file Form 10A to seek fresh re...
-
LEASE-DEED (A brief Introduction) Lease defined. A lease of immovable property is a transfer of a right to enjoy such property, mad...
-
NECESSITY : Sometimes, in view of the expansion of the business, multiple increase in turnover and need for getting finances from the ...
-
· Mumbai ITAT in the case of Mukesh Harilal Mehta held that Exemption U/S 54 cannot be denied merely due to mistake by the developer.
-
Filing income tax returns (ITR) within the specified timelines under the Income-tax Act is not just a legal obligation but also crucial fo...
-
Earlier this year, the Mauritius Government approved the amendment to the India – Mauritius tax treaty, aligning it with the proposal of th...
-
This Tax Alert summarizes a recent instruction issued by the SEZ Division, Department of Commerce, clarifying various concerns relating t...
-
This Tax Alert summarizes a recent judgement of the Delhi High Court (HC) [1] dealing with the issue of denial of input tax credit (ITC) ...
-
Slump sale is transfer of one or more business undertakings for a lump sum consideration, without assigning individual values to the each...
No comments:
Post a Comment