CA Rakesh Ishi
Quick Summary
In the case of Atos IT Solutions and Services Inc vs Deputy Commissioner of Income Tax, International Taxation Circle 1(2)(1), Mumbai [TS-123-ITAT-2023(Mum)] dated 1st March 2023, the ITAT held that the usage of Microsoft license and service desk facility dealing with IT incidents will not be treate
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FAQ :
No, the ITAT has ruled that the usage of Microsoft licenses is not royalty, as there was no transfer of copyright and providing access to a computer does not amount to royalty under domestic law or the India-UK DTAA.
The ITAT has held that online database subscription fees are not taxable as royalty, as the assessee neither created the content nor transferred any copyright or license to use it.
No, the ITAT has ruled that fees for cloud services, colocation, network services, mainframe services, and disaster/data recovery services are not taxable as FIS in India, particularly when DTAA benefits apply.
The 'make available' condition, as per Article 12(4)(b) of the India-USA DTAA, states that income from technical services is only taxable if the services provided fulfil this condition, meaning the recipient can use the technical knowledge or skill without further recourse to the provider.
DTAAs play a significant role. The ITAT has noted that even if domestic law might suggest taxability, assessees are entitled to benefits under applicable DTAAs, such as the India-USA DTAA, which can exempt certain services from taxation in India.
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