Case Law Details
In re Skill Soft Ireland Limited (Authority for Advance Rulings)
Brief of the Case
Authority for Advance Rulings held In the case of SkillSoft Ireland limited that in the case of Synopsis International Old Ltd. 212 TAXMAN 454 (Kar), high court held that merely because the words non-exclusive and non-transferrable are used in the license agreement, it does not take away the software out of definition of copyright. It was further held that even if it is not transfer of exclusive right in the copyright, the right to use the confidential information embedded in the software in terms of the aforesaid license makes it clear that there is transfer of certain rights which the owner of copyright possess in the said computer software/programme in respect of the copyright owned. In this case also similar words have been used in the reseller agreement as well as Master License Agreement. Therefore, irrespective of use of the words like non-exclusive and non-transferable in these two agreements, there is definitely transfer of certain rights of which the applicant is the owner. Hence, the payments received by the applicant are in the nature of royalty under article 12(3) (a) of the India – Ireland Tax Treaty and liable for withholding tax u/s 195.
Facts of the Case
The applicant is a Private Limited Company incorporated under the laws of Ireland. It is engaged in the business of providing on demand elearning course offerings, online information resources, flexible learning technologies and performance support solutions (SkillSoft products). The applicant has entered into a Reseller Agreement dated 9th February, 2009 with SkillSoft Software Services India Private Limited (SkillSoft India) appointing it as a Reseller. SkillSoft India buys the SkillSoft products from the applicant on a principal-to- principal basis and sells the same to Indian end users/customers in its own name. According to the applicant by using software and techniques, it has developed copy righted products on several topics which were electronically stored on its server outside India.
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