TDS u/s 195, Income Tax

[sathyanarayanan kasinathan]

The US Holding company has bought the license for a login, and uses the same during it's day time. The Indian subsidiary company, uses the same login and uses the license during the day time.(Night time in US)

The indian company is reimbursing the US holding company, on the cost portion only, on the basis of Hours usage. It may again be noted that only the cost is shared.

Will this attract TDS u/s 195?
What is the correct stand in the current scenario?

Posts / Replies

[Anuj Gupta]

Here the Department shall like to treat the same as Royalty u/s 9(1)(vii), but according to me the foreign Company is just granting an access to Software License(which according to various court decisons is not royalty). Hence in my view the same should be remmitted without dedction of TDS.