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.

 

[CAGOPALJI AGRAWAL]

The meaning of royalty as defined u/s 9(1) would apply that too restrospectively from June 1, 1976.

AI Summary

Royalty definition: domestic section 9(1) governs cross-border payments to treaty countries, applying retrospectively. The domestic statute governing royalty-section 9(1) as amended-controls characterization of payments to non-residents in USA/UK, and the amended meaning of royalty under section 9(1) applies retrospectively from June 1, 1976.