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Cross-border payments for use of software not taxable as royalty: SC
March 02, 2021
Buyer only gets the right of use, not the intellectual property of the software
The Supreme Court today held that Indian companies need not deduct tax for the amount they pay foreign manufacturers and suppliers for use or re-sale of computer software through end-user licence agreements (EULA).
In a relief for Indian buyers, a three-judge Bench led by Justice Rohinton F. Nariman said the consideration paid by them for use or sale of computer software cannot be considered a payment of “royalty for the use of copyright in the computer software”.