Marketing & Reservation Fees Paid by Indian Hotels to US Hotel Chain not Taxable as Royalty or FIS Under India-US DTAA: Delhi HC

The Delhi High Court held that marketing and reservation fees paid by Indian Hotels to a US hotel chain are not taxable as royalty or fees for included services (FIS) under the India-US Double Taxation Avoidance Agreement (DTAA). The court reasoned that these fees were essentially for business support services and did not fall within the definition of royalty or FIS as defined in the DTAA. The High Court's ruling provides clarity on the taxability of such payments in cross-border transactions between related entities in the hospitality sector, interpreting the specific provisions of the India-US tax treaty.