https://www.taxtmi.com/highlights?id=78630 The Appellate Tribunal addressed the issue of characterizing interconnect utility charges (IUC) as 'Royalty' for TDS u/s 195 of the Income Tax Act and India-Japan DTAA. The revenue argued that the payments constituted 'Royalty' due to the use of process or equipment. However, the Tribunal found that no intellectual property rights were transferred to service recipients, thus Explanation 2 to section 9(1)(vi) did not apply. The Tribunal also noted that changes in the Act did not impact the DTAA definition of 'Royalty.' Citing precedents, the Tribunal held that the payments for services provided did not qualify as 'Royalty' under section 9(1)(vi) Explanation 5 & 6. Since the process was not secret and no exclusive rights were granted, it coul..... en-us Wed, 19 Jun 2024 15:52:43 +0530 Wed, 19 Jun 2024 15:52:43 +0530 TaxTMI RSS Generator https://www.taxtmi.com/highlights?id=78630 The Appellate Tribunal addressed the issue of characterizing interconnect utility charges (IUC) as 'Royalty' for TDS u/s 195 of the Income Tax Act and India-Japan DTAA. The revenue argued that the payments constituted 'Royalty' due to the use of process or equipment. However, the Tribunal found that no intellectual property rights were transferred to service recipients, thus Explanation 2 to section 9(1)(vi) did not apply. The Tribunal also noted that changes in the Act did not impact the DTAA definition of 'Royalty.' Citing precedents, the Tribunal held that the payments for services provided did not qualify as 'Royalty' under section 9(1)(vi) Explanation 5 & 6. Since the process was not secret and no exclusive rights were granted, it coul..... Highlights Income Tax Wed, 19 Jun 2024 15:52:43 +0530 https://www.taxtmi.com/highlights?id=78630