Royalty characterisation: cross-border telecom payments not taxable as royalty, limiting TDS and extraterritorial jurisdiction.
Payments by an Indian telecom operator to non-resident carriers for interconnectivity and capacity transfers are not to be characterised as royalty under the applicable DTAA and therefore do not attract TDS; DTAA interpretation governs characterization, Indian jurisdiction is limited over extra territorial income where the foreign entities lack a taxable presence, and retrospective amendments do not impose tax on past transactions compliant with the law at the time.