CIT Amazon Web Services Inc. (Supreme Court of India)
The Supreme Court dismissed the Revenue’s SLPs against the Delhi High Court judgment concerning cloud-computing receipts earned by Amazon Web Services Inc. from Indian customers, leaving undisturbed the finding that such receipts were neither royalty under section 9(1)(vi) of the Income-tax Act, 1961/Article 12(3) of the India-US DTAA nor fees for technical services/fees for included services (FTS/FIS) under section 9(1)(vii)/Article 12(4). The courts held that customers of AWS received only limited, non-exclusive and non-transferable access to standardised, automated cloud services and did not obtain the use or right to use scientific equipment, as AWS retained ownership, control and operation of its infrastructure. The Revenue’s “make available” argument was also rejected because technical support, troubleshooting and configuration assistance did not transfer technical knowledge, skill, know-how or processes enabling customers to independently apply the technology. On 04.08.2026, the Supreme Court dismissed SLP (C) Nos. 17045/2026 and 21151/2026, observing that no case was made out for interference with the Delhi High Court’s judgment. Accordingly, the Delhi High Court ruling in favour of AWS remains undisturbed.
Core Issue: Taxability of AWS Cloud-Computing Receipts
Whether consideration received by Amazon Web Services, Inc., a US tax resident, from Indian customers for standardised cloud-computing services is taxable in India as “royalty” under section 9(1)(vi)/Article 12(3) of the India-US DTAA or as fees for technical services/fees for included services (FTS/FIS) under section 9(1)(vii)/Article 12(4), particularly on the Revenue’s contention that customers obtained a right to use scientific equipment and that technical knowledge was “made available”.
