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Supreme Court of India rules on royalty payments and foreign software companies


April 15 2021
In a landmark judgment, the Supreme Court of India, in the context of a tax dispute concerning the role and rights of an Indian distributor
vis-à-vis foreign software owner, has opined that: 
Distribution of software to distributor/end user will not constitute grant of an interest in copyright in it; and 
It only grants a non-exclusive, non-transferable licence to resell computer software. 
The tax department sought to classify such a sale under ‘royalty’ payable on account of software sale to resident/s by non-resident companies.
The companies involved in this prolonged litigation included Samsung Electronics, IBM India, Sonata Information Technology, Infineon Technologies and GE India Technology Center. ....

Ranjan Narula , Infineon Technologies , Apex Court , Sonata Information Technology , Supreme Court , Samsung Electronics , Euromoney Institutional Investor , Ge India Technology Center , Income Tax , Privacy Notice , Institutional Investor , ரஞ்சன் நருலா , இண்பினெோன் தொழில்நுட்பங்கள் , உச்சம் நீதிமன்றம் , சொனாட்டா தகவல் தொழில்நுட்பம் , உச்ச நீதிமன்றம் , சாம்சங் மின்னணுவியல் , கே இந்தியா தொழில்நுட்பம் மையம் , வருமானம் வரி , ப்ரைவஸீ அறிவிப்பு , நிறுவன முதலீட்டாளர் ,

No TDS required on import of shrink-wrapped software: Supreme Court


No TDS required on import of shrink-wrapped software: Supreme Court
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No TDS required on import of shrink-wrapped software: Supreme Court
Lubna Kably / TNN / Updated: Mar 3, 2021, 08:10 IST
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MUMBAI: The Supreme Court (SC) on Tuesday ruled that payments made by resident Indian end-users or distributors (such as technology companies) to overseas suppliers on import of ‘shrink-wrapped’ software – generally known as off-the-shelf software, is not a ‘Royalty’ payment. Thus, no withholding tax obligations arise in India, against such payment.
During assessment and at various levels of judicial appeals, payments made for import of shrink-wrapped software to overseas suppliers was held assessable to tax as ‘Royalty’ under section 9(1)(vi) of the I-T Act and Article 12 of the respective tax treaties. This classification as ‘Royalty’ required tax to be deducted at source (TDS) when making payment to the overse ....

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