WEBINAR ON RECENT SUPREME COURT DECISION ON SOFTWARE PAYMENTS

Background:

The Supreme Court in its recent decision in Engineering Analysis Centre of Excellence Private Limited (and others) has put to rest the long-drawn litigation on taxation of software payments to Non-Residents as Royalty under the Indian tax treaties.

The Supreme Court decided the matter in favor of the taxpayers and held that the payments to the Non-Resident computer software manufacturers/suppliers to be consideration for the resale/use of the computers software through the End User Licensing Agreement (‘EULA’) / Distribution Agreements is not payment in the nature of Royalty for the use of Copyright in the computer software under various Indian tax treaties. The Supreme Court held that in light of the definition of Royalty contained in the Article 12 of various tax treaties, the EULA / distribution agreements do not create any interest or right which amounts to use or right to use any Copyright. Accordingly, the Supreme Court held that such payments to Non-Residents are not liable to tax in India under the tax treaties and therefore there is no liability on the Indian payers to withhold tax from such payments to Non-Residents under section 195 of the Income-tax Act 1961.

In this regard, the International Taxation Committee of the Chamber of Tax Consultants is pleased to invite you to a live panel discussion on this very important, landmark and much awaited Supreme Court decision as per following details.