An Indian company\u00a0 pays to a Singapore company license fees for purchase of software which is loaded on to chips procured from outside India. \u00a0The embedded chip is used in SIM card\u00a0 which is sold to various institutions. \u00a0The relevant portion of \u00a0software license agreement \u00a0with \u00a0\u00a0Singapore co is \u00a0re produced below:<\/p>\n
License Grant<\/strong><\/p>\n 1) Against Payment Of the associated license fee, the\u00a0 xx Singapore \u00a0company\u00a0\u00a0 hereby grant the Licensee a non-exclusive<\/strong> (save as may be stated to the contrary in Annex E) and non-transferable license to use the xxxxx \u00a0Product Software<\/strong> and Documentation or any portion thereof \u00a0to manufacture a-Product for the duration of this Agreement. This license shall also include the right for the Licensee to have Products manufactured by its Agents, In which case the Licensee shall be obliged to procure its best reasonable endeavors \u00a0(which shall include the obligation to make adequate provisions in agreements and institute proceedings in term thereof) to ensure that such Agents shall not do anything which would result in the Licensee being in default of any of the provisions of this Agreement. (emphasis supplied by me) <\/strong><\/p>\n 2) Once a Product is manufactured, the Licensee shall have a transferable (Only to the extent that the Licensee may sell or have sold, distribute or have distributed and otherwise dispose of or have disposed of or have disposed of Products to its customers), perpetual and irrevocable license to operate the relevant copy of the xxxxx \u00a0Product Software on the relevant Product that it was loaded onto<\/strong>. (emphasis supplied by me) <\/strong><\/p>\n 3)\u00a0 xx Singapore \u00a0\u00a0co \u00a0hereby grants the Licensee, for the duration of this Agreement only, a fully transferable license to load the xxxxx \u00a0Optional Software onto Chips, provided that the Licensee makes payment to xx Singapore co \u00a0\u00a0of the associated license fee. For the avoidance of doubt, such license shall include the right for the Licensee\u2019s Subsidiaries to allow their customers to load the xxxxx \u00a0Optional Software, which customers can in turn transfer that right to their customers etc. The Licensee (or its Agents and customers) then shall have a perpetual, transferable and irrevocable license to use the xxxxx \u00a0Optional Software so loaded to the extent required to operate the relevant Product. (emphasis supplied by me) <\/strong><\/p>\n 4)\u00a0\u00a0 Products may be supplied to the Licensee\u2019s customers globally, subject to any exclusions as defined in Annex E.<\/p>\n 5)\u00a0 The Licensee may translate or otherwise modify and\/or redesign the Documentation in order that the Products can be sold as the Licensee\u2019s products. Licensee and Distributors shall not be obligated to use or reproduce any xxxxx \u00a0\u00a0Intellectual \u00a0Property Rights\u2019 notices Contained in the Documentation, and\u00a0 Licensee and Distributors may remove any intellectual Property Rights\u2019 notices Contained in the Documentation.\u00a0\u00a0\u00a0\u00a0 xx Singapore \u00a0co \u00a0will however always retain all copyright in and intellectual Property Right in and to its Documentation. (emphasis supplied by me) <\/strong><\/p>\n 6) The xxxxx \u00a0Software is owned exclusively by xx Singapore\u00a0 company and consists of proprietary code developed by xx Singapore co \u00a0which is and shall remain the exclusive property of xx Singapore co \u00a0and the Licensee shall have no rights therein except \u00a0as expressly set out in this Agreement. (emphasis supplied by me) <\/strong><\/p>\n 7) When the licensee wishes to manufacture a product it shall place an order on xx Singapore co \u00a0\u00a0for the corresponding number of licenses or chips that are required in terms of\u00a0 clause (1) or (3) as the case may be. The decision as to whether or not the licensee orders licenses or chips from\u00a0 Singapore co shall be at\u00a0 Singapore co \u00a0discretion. (emphasis supplied by me) <\/strong><\/p>\n In brief, the singapore company has IPR of\u00a0 a particular software which is embedded on to chip used in the SIM card \u00a0\u00a0dealt in by the Indian company. The Singapore company is the final authority as to whether to supply chips embedded with software or to supply software\u00a0 \u00a0on payment of license fees\u00a0 to the indian company and issuing Letter of authority to the chip vendor to load the software.<\/p>\n Under these facts, whether Indian company can take shelter under the recent SC ruling in the case of Engineering Analysis\u00a0\u00a0 Centre of Excellence P Ltd for non deduction of TDS \u00a0on software payment to Singapore co.<\/strong><\/p>\n","protected":false},"comment_status":"open","ping_status":"closed","template":"","qa_expert":[],"qa_category":[23],"qa_tag":[324],"class_list":["post-20742","qa","type-qa","status-publish","hentry","qa_category-income-tax","qa_tag-software-royalty"],"acf":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa\/20742","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/qa"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=20742"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=20742"}],"wp:term":[{"taxonomy":"qa_expert","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa_expert?post=20742"},{"taxonomy":"qa_category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa_category?post=20742"},{"taxonomy":"qa_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa_tag?post=20742"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}