eBay International AG need not pay tax on profits earned from India operations, the Mumbai Income-Tax Appellate Tribunal has ruled.
The tribunal ruled that the fees received from customers for use of an online platform cannot be characterised as fees for technical services (FTS) under income-tax law. Such fees are in the nature of ‘business profits’, it said.
The tribunal concluded that eBay International had no permanent establishment (PE) in India and, therefore, the ‘business profits’ earned here were not taxable. [source]
Software sector to gain from Nokia tax case ruling
The High Court ruled in a case of Nokia Networks that payment for software would not qualify as ‘royalty’ under the India-Finland Double Taxation Avoidance Agreement (DTAA).
Nokia had entered into agreement for supply of GSM equipment with a few Indian cellular operators. [source]