India-USA DTAA - royalty income - Microsoft application seeking advance ruling rejected on ground that similar issue is pending with Tribunal
TIOL Netizens may recall a series of news reports and views carried by us in the case of royalty income of Gracemac Corporation of the USA which had the proprietary right over all the software and other products of Microsoft Corporation, and the same were manufactured and distributed by the Singapore-based Microsoft Operations Pte Ltd, in Asia, including India. In fact, the Singapore-based subsidiary had entered into an agreement with the Microsoft Regional Sales Corporation which has been selling a wide range of IT products through a marketing architecture of distributors/re-sellers to Indian customers. With the Revenue insisting on withholding tax on payments made to the USA-based entity as it always believed that it was royalty income, taxable under Sec 9(1)(vi) and also under DTAA , the applicant Microsoft Operations Pte Ltd moved the Authority for Advance Ruling on the question of TDS u/s 195 on such payments made to Microsoft.
We bring you this AAR Ruling today – See Breaking News