Coursera Inc. Vs ACIT (ITAT Delhi)
In a significant development for online education platforms, the Income Tax Appellate Tribunal (ITAT) Delhi has ruled in favor of Coursera Inc., a US-based online learning platform, in a dispute regarding the taxability of its receipts from Indian customers. The ITAT’s decision, for the Assessment Year 2022-23, upholds the previous rulings that the income earned by Coursera from providing online courses does not qualify as “Fees for Included Services” (FIS) under Article 12(4) of the India-US Double Taxation Avoidance Agreement (DTAA) or as Fee for Technical Services (FTS) under the Income Tax Act, 1961. This ruling follows a similar outcome for Coursera in the Assessment Years 2020-21 and 2021-22, which was further affirmed by the Delhi High Court.
Coursera Inc., engaged in facilitating online education and hosting multimedia courses, had filed its return of income for AY 2022-23 declaring ‘Nil’ income. However, the Assessing Officer (AO) noted gross receipts of Rs. 156,00,36,258/- from India, comprising income from both individual and enterprise customers. The AO, citing prior assessment years, contended that these receipts should be classified as royalty or FTS/FIS. The assessee, Coursera, countered that its services were merely providing an online learning platform, and the payments received did not fall within the ambit of royalty or FIS as per the India-US DTAA.
