payments to Non-Residents to USA/UK, Which definition will apply? As per DTAA or as per section 9(1).

[A Wilson]

Dear Experts,

Recently in Budget 2012, the definition of Royalty vide in section 9(1)(v)(vi)(vii) has been amended with Certain Explanations. But the same has not been amended with DTAA with USA/UK.

While making  payments to Non-Residents to USA/UK, Which definition will apply? As per DTAA or as per section 9(1).

Pls give your valuable points.

 

AI Summary

Debate on Applicable 'Royalty' Definition for Payments to Non-Residents: DTAA vs. Amended Section 9(1) of Indian Tax Act. A discussion was initiated regarding which definition of 'royalty' should apply when making payments to non-residents in the USA or UK: the definition under the Double Taxation Avoidance Agreement (DTAA) or the amended definition under section 9(1) of the Indian Income Tax Act. The query highlighted that the Budget 2012 amended the definition of royalty in section 9(1), but not in the DTAA with the USA/UK. An expert responded that the definition under section 9(1) would apply retrospectively from June 1, 1976.