Subscription income for online database access was not treated as royalty under the India-Switzerland treaty.

Subscription income for access to an online database was analysed under section 9(1)(vi) and Article 12(3) of the India-Switzerland DTAA, and the Tribunal applied its earlier rulings on identical IQVIA subscription receipts. As the treaty wording was materially identical and no distinguishing facts or legal change were shown, the principle of consistency was followed. The subscription fees were treated as not constituting royalty and were therefore not taxable as royalty. Grounds relating to recomputation of income were not pressed, and the interest issues were consequential.

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Issues: Taxability of subscription income received for access to an online database as royalty under section 9(1)(vi) and Article 12(3) of the India-Switzerland DTAA.

Analysis: The Tribunal followed its own earlier decisions in the assessee's case for preceding assessment years, where identical subscription receipts from access to IQVIA reports were held not to constitute royalty. The Tribunal noted that the treaty provision was materially identical to the provision considered in the earlier ruling, and that no distinguishing facts or legal change had been shown. Applying the principle of consistency, it held that the subscription fees were not taxable as royalty. The grounds relating to recomputation of income were not pressed, and the interest grounds were only consequential.

Conclusion: The subscription income was not assessable as royalty, and the assessee succeeded on the substantive issue.

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