Data Connectivity Services provided outside India Cannot be Taxed as Royalty under Article 12 of India-Singapore

The Delhi High Court ruled that data connectivity services provided outside India by Telstra Singapore Pte. Ltd. are not taxable as 'royalty' under Article 12 of the India-Singapore Double Taxation Avoidance Agreement (DTAA). The court emphasized that the use of equipment controlled and operated by the service provider constitutes a service transaction, not the "use or right to use" the equipment, which would be subject to royalty. This interpretation is supported by the DTAA's specific provisions, which take precedence over the broader definitions in the Indian Income Tax Act. Thus, income from these services is not considered royalty and is not taxable in India under the DTAA's beneficial terms​