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Case Law Details

Case Name : M/s Dassault Systems K.K, In re. (Authority for Advance Rulings)
Appeal Number : A.A.R. No. 821/2009
Date of Judgement/Order :
Related Assessment Year :
Courts : Advance Rulings
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Authority for advance ruling recently held that payments received by the Applicant from its Indian reseller for supply of software products to end users should not be classified as royalty. The AAR further held that the relationship between the Applicant and the re seller does not create a permanent establishment (PE) for the Applicant under the agency rule. Hence, the payment should not be taxed in India under the provisions of the India-Japan Tax Treaty (Treaty).

Background and facts of the case

  1. The Applicant, a company incorporated in Japan, is engaged in the business of providing software solutions, applications and services. The software product dealt with by the Applicant is a standardised but special purpose software. It is neither customised nor is it available off the shelf.
  2. The Applicant markets its software products in India through a distribution channel comprising value added re sellers (VAR). The VAR are unrelated third parties who are in the business of selling software to end users on a non-exclusive basis.
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0 Comments

  1. gary says:

    Hello, have the laws concerning this article changed at all since written? I am getting pressure from my VAR for a situation which appears identical.
    Thank you.

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