Google India was granted reduction on Friday because the Income Tax Appellate Authority (ITAT) mentioned the funds made by the corporate to Google Ireland between 2007-08 and 2012-13 weren’t royalties and had been therefore not topic to withholding tax. The Bengaluru-bench of the ITAT handed the ruling after re-examining the matter on the orders of the Karnataka High Court. The case pertains to whether or not funds totalling Rs 1,457 crore made by Google India to Google Ireland is a royalty and whether or not the tax was to be withheld in India.
The ITAT in its earlier order in 2018 had held that Google India’s fee to Google Ireland is royalty and tax must be paid in India. However, Karnataka High Court directed ITAT to re-examine the matter.
In its recent ruling dated October 19, 2022, the ITAT put aside its 2018 order and mentioned that such switch of cash was not a royalty.
Allowing the attraction of Google India, the ITAT, in a 72-page order dated October 19, mentioned, “we hold that the impugned payment cannot be characterised as royalty under the India-Ireland DTAA.” An electronic mail despatched to Google India for touch upon the difficulty didn’t elicit a response.
The ITAT ruling comes a day after Google was hit with a Rs. 1,337.68 crore penalty, imposed by the Competition Commission of India (CCI) for abusing its dominant place in a number of markets in relation to Android cell gadgets.
The CCI’s penalty quantity of Rs. 1,337.68 crore imposed on Google is “provisional”, the regulator mentioned, because it has requested the web main to furnish requisite monetary particulars because the information was not offered in a dependable method.
The penalty of Rs. 1,337.76 crore interprets to 10 % of Google’s common of related turnover for the final three previous monetary years 2018-19, 2019-2020 and 2020-21.
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