Online Database Access & Journal Sales to Indian Customers Exempt from Royalty Taxation Due to Lack of PE.

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....The case deals with the taxability of receipts from Indian customers for providing access to online databases/journals or sale of hard copy journals. The key points are: the assessee did not have a Permanent Establishment (PE) in India. Providing access to online databases/journals does not amount to royalty as it merely grants access to copyrighted articles, not the copyright itself, as per Supreme Court decisions. The receipts do not constitute consideration for granting rights in the copyright under Explanation 2 to Section 9(1)(vi) of the Act, hence not taxable as royalty. The services also do not qualify as Fees for Included Services (FIS) as they do not satisfy the 'make available' clause under Article 12 of the Double Taxation Avoida.........