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DELHI HIGH COURT
MANMOHAN, NAVIN CHAWLA
EY Global Services Limited – Appellant
Versus
Assistant Commissioner of Income Tax – Respondent
| Table of Content |
|---|
| 1. challenge to aar rulings based on amalgamation. (Para 1 , 2 , 3) |
| 2. services provided by eygsl (uk) and eygbs (india). (Para 4 , 5) |
| 3. tax implications regarding payments and services. (Para 6) |
| 4. decision of the aar on tax classification. (Para 7 , 8) |
| 5. parties' arguments on the applicability of supreme court ruling. (Para 9 , 10) |
| 6. court's analysis based on legal precedents. (Para 12 , 13 , 14) |
| 7. rejection of aar's reliance on prior case law. (Para 15 , 16) |
| 8. conclusion on the nature of payments not being royalty. (Para 17 , 18) |
| 9. outcome of the petitions. (Para 19) |
JUDGMENT
Navin Chawla, J.
1. These petition(s) challenge the Rulings/Orders both dated 10.08.2016 of the Authority for Advance Rulings (Income Tax), New Delhi (hereinafter referred to as the 'AAR') in the Application(s), being AAR No. 1043 of 2011; AAR No. 1408 of 2012; and AAR No. 1409 of 2012.
2. The Application, being AAR No. 1043 of 2011, was filed by EY Global Services Ltd. (formally known as EYGBS Ltd). The Application(s), being AAR No. 1408 of 2012 and 1409 of 2012, were filed by M/s EYME Technologies Private Limited and EYGBS (India) Private Limited, respectively. As recorded in the Impugned
Payments for software licenses do not constitute taxable royalty in India under the Income Tax Act and the India-UK Tax Treaty due to lack of copyright transfer.
Point of Law : A licence conferring no proprietary interest on the licencee, does not entail parting with the copyright.
(1) No copyright exists in India outside provisions of Copyright Act or any other special law for time being in force.(2) Ownership of copyright in a work is different from ownership of physical mate....
A licence conferring no proprietary interest on the licencee, does not entail parting with the copyright. Where the core of a transaction is to authorise the end-user to have access to and make use o....
The interpretation of the Income Tax Act, Indo US DTAA, and Copyright Act, 1957 in determining the taxability of software licensing in India.
Payments by Indian end-user to non-resident for software under EULA granting restricted use rights (no copyright transfer) do not constitute royalty under Section 9(1)(vi) or DTAA Article 12; no TDS ....
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