Case Law Details
Amazon Web Services Vs ACIT (ITAT Delhi)
ITAT Delhi held that rendering cloud computing services/ Amazon Web Services (AWS Services) cannot be held to be liable to tax in India either as royalty or as Fees for Technical Services (FTS)/ Fees for Included Services (FIS).
Facts- The assessee is a foreign company and a tax resident of USA. The assessee provides ‘standard and automated’ cloud computing services /AWS services to its customers around the globe. It is alleged that payment received by the assessee from Indian customers amount to Rs. 2,47,68,23,222/- and Rs. 1007,81,05,172/- is liable to tax in India as both royalty and fee for technical/ included services (FTS/ FIS) under the provisions of Income Tax Act as well as India-USA DTAA.
Conclusion- Held that the AWS services provided by the assessee are standardised services that do not provide any technical services to its customers nor satisfy the ‘make available’ test as the customer will not be able to make use of the technical knowledge, skill, process etc. used by the assessee in providing cloud services by itself in its business or for its own benefit without recourse to the assessee in future.
Pune Tribunal in the case of M/s Sunguard Availability Services LLP (supra) and Rackspace, US Inc. has held that rendering cloud computing service cannot be held to be liable to tax in India as FTS/FIS.
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