Subscription received for Cloud Services is not a royalty income

MOL Corporation Vs DCIT (International Taxation) Circle (ITAT Delhi)

Bench is of considered view that the cloud base services do not involve any transfer of rights to the customers in any process. The grant of right to install and use the software included with the subscription does not include providing any copy of the said software to the customer. The assessee’s cloud base services are though based on patents / copyright but the subscriber does not get any right of reproduction. The services are provided online via data centre located outside India

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