Wednesday, January 15, 2014

Internet Services to be treated as "Royalty"

The Madras High Court, after evaluating the contractual arrangements and the manner in which the services are rendered, held that payments for IPLC services are for “use of equipment” and hence taxable as ‘royalty’ under domestic law as well as the India-Singapore Tax Treaty. The International Private Leased Circuit (IPLC) is an end-to-end managed dedicated bandwidth connectivity service used to transmit data or voice across geographically dispersed locations. It is generally used to establish virtual connectivity or provide internet services.

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