Article

Delhi High Court holds Parliament cannot amend international treaty unilaterally; payment for data transmission services through a transponder is not “royalty” under tax treaties

Global Tax Update:March 2016/India

The Indian courts through various judicial pronouncements had held that unlike the domestic tax laws, under the tax treaty the income from use / right to use a process is considered as royalty only if it is a secret process and in view of this difference in the definition, payment for data transmission services through a transponder would not qualify as royalty income in India after applying the provisions of tax treaty. (Global Tax Update:March 2016/India)

Explore content

1. Delhi High Court holds Parliament cannot amend international treaty unilaterally; payment for data transmission services through a transponder is not “royalty” under tax treaties

The Indian courts through various judicial pronouncements had held that unlike the domestic tax laws, under the tax treaty the income from use / right to use a process is considered as royalty only if it is a secret process and in view of this difference in the definition, payment for data transmission services through a transponder would not qualify as royalty income in India after applying the provisions of tax treaty.

2. Consideration paid in excess of net assets taken over under business transfer arrangement could be treated as goodwill and depreciation could be allowed on the same

The Delhi High Court in its ruling has held that the taxpayer was eligible to claim depreciation on goodwill arising on purchase of business as a going concern under a business transfer arrangement.

3. CBDT directs tax officers to follow prescribed time limit for passing rectification orders

The CBDT has directed the tax authorities to follow the prescribed time limit of 6 months in passing the rectification orders. The CBDT has also directed to pass such orders in writing as mandated under the domestic tax laws.

4. Visa on arrival for Japanese nationals

The Government of India has extended visa on arrival facility to Japanese nationals with effect from 1 March 2016.

 

 

>> Click for Japanese [デリー高等裁判所判決 :議会による国際条約の一方的な改正は不可、中継装置を使用するデータ転送サービスの対価は租税条約上の「使用料」には当たらず、ほか]

(64KB, PDF)

Related services

Deloitte Tohmatsu Tax Co., support clients’ business development in India with our up-to-date knowledge regarding Japanese and Indian tax practice and a wealth of experience in the field.

Did you find this useful?