Tax alert: Interconnectivity utility charges not taxable as royalty under domestic tax law

5 July 2024

The Bangalore Bench of the Income-tax Appellate Tribunal has held that interconnectivity utility charges (IUC) [also referred to as ‘interconnectivity usage charges’] received by the taxpayer (non-resident telecom operator) from an Indian entity would not be taxable as royalty under section 9(1)(vi) of the Income-tax Act, 1961. 

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