Cybersecurity software sale not taxable as FTS: ITAT rules payments outside scope of s. 91(vii) and India-Ireland DTAA as no human interface involved

This article discusses an ITAT ruling where payments made by an Indian company for cybersecurity software to an Ireland-based company were held not taxable as 'Fees for Technical Services' (FTS) under section 9(1)(vii) of the Income Tax Act or the India-Ireland DTAA. The Tribunal emphasized the absence of a human element in the service, a key criterion for FTS classification. The decision is crucial for software and SaaS transactions, clarifying that automated or digitally delivered software without human involvement does not attract FTS taxation, thus benefiting companies engaged in international tech transactions.