PremiumThe Income Tax Appellate Authority (ITAT) on 21 October gave a relief to Google India and said the payments made by the company to Google Ireland between 2007-08 and 2012-13 is not a royalty. With this, it is not subject to withholding tax.
After re-examining the matter on the orders of the Karnataka High Court, the Bengaluru-bench of ITAT gave this ruling.
The case relates to if the payments totalling ₹1,457 crore made by Google India to Google Ireland is a royalty and tax is to be withheld in India.
In its earlier order in 2018, the ITAT held that Google India's payment to Google Ireland is royalty and tax should be paid in India. However, Karnataka High Court directed ITAT to re-examine the matter.
The ITAT set aside its 2018 order on 19 October and issued a fresh ruling, saying hat such transfer of money was not a royalty.
The ITAT, in a 72-page order dated 19 October allowed the appeal of Google India and said, "We hold that the impugned payment cannot be characterised as royalty under the India-Ireland DTAA."
Earlier in the day, Google said that it will review Competition Commission of India (CCI)'s Rs1,337.76 Crore penalty order for its anti-competitive practices. Google also termed the order a "major setback" for Indian consumers and businesses.
The tech giant, in its first official response after the CCI order, said Android has created more choices for everyone and supports thousands of successful businesses in India and around the world.
"The CCI's decision is a major setback for Indian consumers and businesses, opening serious security risks for Indians who trust Android's security features, and raising the cost of mobile devices for Indians," a Google spokesperson said in an email statement.
With PTI inputs.