TMI Blog2012 (5) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... he DTAC between India and Singapore Whether tax is required to be deducted from such amount by the subscribers who are resident in India – Held that:- tax is required to be deducted in terms of section 195 of the Act from the payment made to it by the subscribers who are resident in India - A.A.R. No. 1036 of 2010 - - - Dated:- 7-5-2012 - Mr Justice P.K. Balasubramanyan, J. Present for the Department : Mr. P. Selvaganesh, Addl.Director of Income-tax, Chennai. R U L I N G The applicant claims to be a tax resident of Singapore. It is engaged in providing social media monitoring service for a company, brand or product. It is a platform for users to hear and engage with their customers, brand ambassadors etc. across the inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicant s own knowledge, experience or skill in commercial and financial matters. The income is taxable only in Singapore in terms of Article 7 of the DTAC since the applicant has no permanent establishment in India. Secondly, there is no obligation to withhold tax on the payments made to the applicant by its Indian subscribers. 2. The Revenue not having raised any objection to the allowing of the application under section 245R(2) of the Act, the application was allowed for rendering a ruling on the following questions: (a) Whether the amount received by offering subscription based service is taxable in India? (b) Whether tax is required to be deducted from such amount by the subscribers who are resident in India? 3. On beh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posessory rights in relation to the equipments and they merely took them as a facility or as use of sophisticated equipment installed by the applicant. 5. At the hearing, in addition to reiterating what is set out in the application and the subsequent written submission, it was pointed out on behalf of the applicant that the applicant was only providing information over the web, and the applicant has no intellectual property right over it. Its role was only to gather and put the information together and give it to the subscriber. 6. On behalf of the Revenue, attention was invited to Annexure-I of the application to point out that certain proprietory processes were involved in the subscription based service. It was restricted information ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India and Singapore, it will qualify as royalty since it is the grant of the use for consideration or right to use for consideration, the process or information concerning industrial, commercial or scientific experience and under the DTAC the subscription received from the Indian subscriber would be taxable as royalty and taxable in India in view of paragraph 2 of Article 12 of the DTAC, subject to the benefit conferred therein on the applicant on fulfilling the condition imposed by that paragraph. 10. I, therefore, rule on question (a) that the amount received from offering the particular subscription based service is taxable in India as royalty in terms of paragraph 2 of Article 12 of the DTAC between India and Singapore and on questi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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