Practical Accounts And Taxation
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Under the Google AdWords Reseller Agreement Assessee-Google India made payments to Google Ireland in relation to purchase of advertisement space for resale to the advertisers in India. Google India was licenced to use the trade marks, IPRs, brand features, derivative works and other intangibles etc, owned by Google Ireland though it may not be transferred in favour of Google India Under AdWord Distributor Agreement and the Service Agreement.Hence, the consideration paid by Google India is certainly in the nature of payment of royalty and is chargeable to tax under section 9(1)(vi) and under article 12 of the DTAA between India and Ireland. Since Google India has not deducted the tax at source as per provisions of section 195, Google India was rightly held to be in default under section 201(1).
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