Subscription fees for online research reports not treated as royalty under treaty protection

Subscription fees for access to online pharmaceutical market research reports were analysed under the royalty and fees for technical services provisions, but the receipts arose from standard access to compiled reports sourced from public data and supplied on a non-exclusive, non-transferable basis. The Tribunal followed its earlier year rulings on materially identical facts and applied the principle of consistency, finding no reason to depart from that view. It held that the treaty, being more beneficial, prevailed and that the subscription receipts did not fall within the royalty limb on the facts presented, so they were not taxable in India as royalty.

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Issues: Whether subscription fees received for access to online pharmaceutical market research reports were taxable as royalty or fees for technical services, or constituted business income not chargeable in India under the applicable treaty.

Analysis: The receipt arose from standard access to compiled market research reports generated from publicly sourced data and supplied under a non-exclusive, non-transferable arrangement. The dispute had already been examined in the assessee's own earlier years on materially identical facts, where the subscription receipts were held not to be royalty. Following that binding and recurring line of reasoning, and applying the principle of consistency, the Tribunal found no basis to depart from the earlier view. The treaty position was held to prevail where more beneficial, and the impugned receipts were not brought within the royalty limb on the facts presented.

Conclusion: The subscription fees were held not taxable as royalty, and the assessee succeeded on the substantive grounds.

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