Fee for use of satellite is “royalty” under Act & DTAA

RELEVANT EXTRACT The assessee, a foreign company, was engaged in operating geostationary telecommunication satellites with transponder capacity which were provided to telecasting companies in India for a fee. The question arose whether the said fee was “consideration for … the use of any … secret formula or process …” so as to constitute “royalty” under Expl. 2 to s. 9 (1)(vi) and corresponding definition under the DTAA. In Asia Satellite 85 ITD 478 the Tribunal held that the said receipts were taxable as ‘royalty’ having been paid in respect of a “process”. However, in P...