The ITAT ruled in 2018 that Google India’s payment to Google Ireland constituted a royalty and that the tax should be paid in India.
The Income Tax Appellate Authority (ITAT) ruled on Friday that Google India’s payments to Google Ireland between 2007-08 and 2012-13 were not royalties and hence not subject to withholding tax. The ITAT’s Bengaluru bench issued the verdict after re-examining the case on the instructions of the Karnataka High Court. The dispute concerns whether Google India’s payments of Rs 1,457 crore to Google Ireland constitute a royalty and if the tax ought to be withheld in India.
The ITAT previously ruled in 2018 that Google India’s payment to Google Ireland is royalty and should be paid in India. However, the Karnataka High Court ordered the ITAT to re-examine the case.
The ITAT threw aside its 2018 judgement in a new ruling dated October 19, 2022, and said that such a transfer of money was not a royalty.
In granting Google India’s appeal, the ITAT said in a 72-page ruling dated October 19, “we find that the challenged payment cannot be classified as royalty under the India-Ireland DTAA.” An email submitted to Google India seeking comment on the matter received no response.
The ITAT decision came only one day after Google was fined Rs. 1,337.68 crore by the Competition Commission of India (CCI) for abusing its dominant position in numerous areas relating to Android mobile devices.
The CCI’s penalty of Rs. 1,337.68 crore levied on Google is “provisional,” according to the regulator, who has urged the internet giant to provide required financial information since the data was not given in a verifiable way.
The penalty of Rs. 1,337.76 crore equates to 10% of Google’s average relevant turnover for the previous three fiscal years (2018-19, 2019-2020, and 2020-21).
This week, Apple introduced the iPad Pro (2022) and the iPad (2022), as well as the new Apple TV. On Orbital, the Gadgets 360 podcast, we examine the company’s newest goods, as well as our evaluation of the iPhone 14 Pro. Orbital may be found on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music as well as wherever you receive your podcasts.
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