The Bengaluru-bench of ITAT gave this ruling after
re-examining the matter on the orders of the Karnataka High Court.
The case relates to whether payments totalling Rs 1,457
crore made by Google India to Google Ireland is a royalty and tax is to be
withheld in India.
The ITAT in its earlier order in 2018 had held that Google
India's payment to Google Ireland is royalty and tax should be paid in India.
However, Karnataka High Court directed ITAT to re-examine the matter.
In its fresh ruling dated October 19, 2022, the ITAT set
aside its 2018 order and said that such transfer of money was not a royalty.
Allowing the appeal of Google India, the ITAT, in a 72-page
order dated October 19, said, "we hold that the impugned payment cannot be
characterised as royalty under the India-Ireland DTAA."
Email sent to Google India for comment on the issue did not
elicit a response.
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