AWS India liable to withhold 8% tax of remittance on account of reseller fee paid to AWS USA

Amazon Web Services India Pvt Ltd & Anr Vs ITO (Delhi High Court)

Delhi High Court held that Amazon Web Services India Pvt. Ltd. (AWS India) is liable to withhold 8% (instead of 16%) tax of remittance on account of reseller fee paid to AWS USA.

Facts- AWS India claims that it is engaged in the business of reselling web services to third party customers in India. AWS USA is a company, which has its principal place of business in the United States of America and is, inter alia, engaged in the business of providing web services to its customers and resellers world-wide, including AWS India.

AWS USA is a tax resident of the United States of America and holds a tax residency certificate (TRC).

AWS India claims that in terms of the Reseller Agreement between AWS India and AWS USA, it was appointed as a non­exclusive reseller of web services on a principal to principal basis. AWS India sought a certificate from the AO for nil withholding of tax in respect of the reseller fee paid by AWS India to AWS USA.

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