Payment Gateway Fees Not Taxable as Royalty in India: ITAT Kolkata

Flywire Payments Corporation Vs CIT(A) (ITAT Kolkata) Background Assessee, a US tax resident, acts as an international payment gateway for foreign universities/colleges to collect fees from Indian students. For Indian transactions, Flywire entered into an agreement (01.03.2013) with Muthoot Forex Ltd. for currency conversion & remittance. As per agreement, Muthoot retained 1% margin of INR value as commission; remaining fees transferred to Flywire for onward remittance to foreign universities. AO treated payments from Muthoot to Flywire as “royalty”, alleging Muthoot used Flywire’s ...