Royalty

ING Vysya Bank Ltd vs. DDIT (ITAT Bangalore) - From a plain reading of the definition of 'royalty' given in Article 12(3) of DTAA between India and Switzerland it is clear that any payment made for the use of or right to use of the properties mentioned there in would be royalty. We find that both the definitions are similar and encompass the payment for 'the use of and the right to use of' any intellectual property mentioned therein such as copyright of a literary, artis.. Full Article

Recently in the case of Lanka Hydraulic Institute Limited In AAR No. 874 of 2010 , the Authority for Advance Rulings (AAR) held that where the scope of work under a contract is primarily related to technology transfer by way of software along with ancillary services in the nature of field data collection/mathematical model studies, the consideration would constitute "Royalty" under Article 12 of the Double Taxation Avoidance Agreement with Sri Lanka (the tax treaty). The.. Full Article

Recently ITAT Mumbai in the case of Standard Chartered Bank (Taxpayer) (ITA No. 3827/ MUM/ 2006) on the issue whether data processing charges paid by the Taxpayer would constitute 'royalty' under the Indian Tax Laws (ITL) and the India - Singapore Tax Treaty (Tax Treaty) held that the payments were made for use of a facility and not any process. Furthermore, in the absence of control or physical access to any equipment, it cannot be said that the payment was made for any.. Full Article

The facts of the case are that the assessee is a Singapore based company engaged in the business of acquiring television programs, motion pictures and sports events and exhibiting the same on its television channels from Singapore. The assessee is a tax resident of Singapore in terms of Article 4 of the India Singapore Tax Treaty. The assessee had entered into an agreement on January 25, 2002 with Global Cricket Corpn. Pte Ltd (GCC) (also a tax resident of Singapore u.. Full Article

ITAT held that the consideration paid by the taxpayer to foreign affiliates for purchase of Business Information Report (BIR) was not ‘royalty’ within the meaning of explanation 2(iv) to section 9(1 )(vi) of the Income-tax Act, 1961 (the Act). Further, no withholding of tax is required when payment is made to foreign affiliates for purchase of Business Information Report. Full Article

Mumbai bench of the Income-tax Appellate Tribunal held that subscription income received by a foreign entity from Indian clients is not in the nature of Royalty in accordance with the India-Ireland tax treaty (tax treaty). Further, the Tribunal relying on various Supreme Court decisions observed that the orders of the higher appellate authorities should be followed by the subordinate authorities and non compliance of this rule will result into undue harassment to taxpay.. Full Article

In this Ruling Authority for Advance Rulings decided on taxability of certain computer software payments. Having regard to the facts of the case, the AAR distinguished between transfer of ‘rights in copyrighted software’ and transfer of a ‘copyrighted software’ and observed that mere transfer of computer software de-hors any copyright associated with it, would not amount to royalty. Accordingly, the payments were held not to be in the nature of royalty nor fees f.. Full Article

Recently, the Mumbai Tribunal held that the consideration received by the taxpayer for providing strategic consulting services cannot be considered as Fees for Technical Services (FTS) or Royalty within the provisions of the India-Switzerland tax treaty (See Note 1 at the bottom). Full Article