Cloud Service Payments Not Taxable as Royalty Due to No Transfer of IP Rights: SC

CIT Vs Amazon Web Services Inc (Supreme Court of India) The case concerns whether payments received by a non-resident entity from Indian customers for cloud computing services are taxable in India as “royalty” or “fees for technical services” (FTS) under the Income Tax Act, 1961 and the India–US Double Taxation Avoidance Agreement (DTAA). The Assessing Officer (AO) initiated reassessment proceedings based on information that an Indian entity had made remittances to the assessee without withholding tax. The AO held that such payments were taxable as royalty and FTS, reasoning that the...