|COURT:||Bombay High Court|
|CORAM:||Akil Kureshi J, M. S. Sanklecha J|
|CATCH WORDS:||India-Netherlands DTAA, Retrospective amendment, royalty|
|DATE:||February 5, 2019 (Date of pronouncement)|
|DATE:||June 8, 2019 (Date of publication)|
|FILE:||Click here to view full post with file download link|
|S. 9(1)(vi) 'Royalty': The insertions of Explanations 5 & 6 to s. 9(1)(vi) by the Finance Act 2015 w.r.e.f. 01.04.1976, even if declaratory and clarificatory of the law, will not apply to the DTAAs. The DTAAs are a bilateral agreement between two Countries and cannot be overridden by a unilateral legislative amendment by one Country (New Skies Satellite BV 382 ITR 114 (Del) & Siemens AG 310 ITR 320 (Bom) followed)|
India’s change in position to the OECD Commentary cannot be a fact that influences the interpretation of the words defining royalty as they stand today. The only manner in which such change in position can be relevant is if such change is incorporated into the agreement itself and not otherwise. A change in executive position cannot bring about a unilateral legislative amendment into treaty concluded between two sovereign states. It is fallacious to assume that any change made to domestic law to rectify a situation of mistaken interpretation can spontaneously further their case in an international treaty.