1. Introduction

 

In a recent decision, the Indian Income Tax Appellate Tribunal (ITAT) opined that a US company’s income on account of Internet domain name registration fees amounted to ‘royalties’. On that basis, the ITAT held that the said income (from Indian customers) was taxable in India.

 

With due respect to the ITAT, it seems difficult to reconcile with the ITAT’s approach and conclusion.

 

As the above-mentioned issue has far-reaching implications in many jurisdictions, it warrants a detailed analysis.