Google India’s to move HC against ITAT ruling on royalty tax, Ad-Words programme. 


BENGALURU: Google India said it will move the high court against the latest ruling by the Bengaluru Income Tax Appellate Tribunal that mandated the search engine giant pay royalty tax for its Ad-Words programme.

The tribunal had passed a similar order in October for different assessment years and Google had appealed in the Karnataka High Court in November.

The tribunal agreed with the tax department in the proceedings related to tax deduction default from 2007-08 to 2015-16, after issuing a similar order in October. While the order in October looked mainly at the royalty issue, the latest ruling considered aspects such as transfer pricing and the structure of Google’s business operations in India, according to the order document sourced from TaxSutra.


The tribunal said Google India’s payments to Google Ireland in terms of the AdWords Distribution Programme constitute ‘royalty’ and the company is therefore obliged to deduct tax at source. Google India, a subsidiary of Google Intl, was authorised by Google Ireland to distribute the AdWords programme to Indian advertisers.


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