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March 2023

Article 12 of India – Singapore tax treaty – Uplinking and Playout Services are not royalty or FTS

By Geeta Jani | Dhishat B. Mehta | Bhaumik Goda
Chartered Accountants
Reading Time 3 mins
17 Adore Technologies (P) Ltd vs. ACIT [ITA No: 702/Del/2021] A.Y.: 2017-18 Date of order: 19th December, 2022 Article 12 of India – Singapore tax treaty - Uplinking and Playout Services are not royalty or FTS FACTS
The assessee, a tax resident of Singapore provides satellite-based telecommunication services. He earned income from disaster recovery uplinking and playout services1. The AO held that the disaster recovery uplinking service of the assessee is nothing but a part of a process wherein signals are taken from the playout equipment and sent to the satellite for broadcasting them to cable operators/direct to home operators. The AO relied on Explanation 6 to section 9(1)(vi) to assess the remittance as process royalty. Further, playout services were held to be inextricably linked with uplinking services and were taxable as FTS under Act and DTAA. DRP upheld order of AO. Being aggrieved, the assessee appealed to ITAT.

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