Law:

Section:

Section 9 of the Income-tax Act, 1961, read with article 12 of the Double Taxation Avoidance Agreement between India and Singapore (Royalties/fee for technical services) - Income - Deemed to accrue or arise in India - Applicant, a Singaporean company, is engaged in providing social media monitoring service for a company, brand or product - System operated by applicant generates report with analytics with inputs provided by clients - Information for generation of report is obtained from blogs and forum, social networking sites, review sites, question and answers sites and twitter - It offers service on charging a subscription - Subscribers can login applicant's website to do a search on what is being spoken about various brands and so on - Applicant has sought advance ruling on taxability of subscription received by it in India - Whether applicant is in business of gathering, collating and making available or imparting information concerning industrial and commercial knowledge, experience and skill and, consequently, payment received by it from subscribers would be royalty in terms of clause (iv) of Explanation 2 to section 9(1)(vi) and article 12 of DTAA - Held, yes [In favour of revenue] FACTS The applicant, a Singaporean company, is engaged in providing social media monitoring service for a company, brand or product. It is a platform for users to hear and engage with their customers, brand ambassadors, etc., across the internet. The applicant offers service on charging a subscription. The clients, who subscribe, can login to its website to do a search on what is being spoken about various brands and so on. The system operated by the applicant generates a report with analytics with an input provided by the clients. The information for generation of report is obtained from blogs and forum, social networking sites, review sites, question and answers sites and twitter. The applicant does not depend on third party application programme interface feeds for data collection and has its own crawlers (computer programme that gathers and categorizes information on the internet) for data extraction. The applicant does not have a permanent establishment in India. The…

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