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“India's new Consent Management Systems framework isn't just another compliance requirement – it's rewiring how business gets done. Our analysis focuses on balancing market interpretation of techn...
The Indian public cloud services market (including Infrastructure-as-a-Service, Platform-as-a-Service, and Software-as-a-Service) had generated a revenue of USD 5.2 billion in the first half of 2024. It is expected to reach USD 25.5 billion by 2028 (CAGR 24.3% from 2023-28).
Cloud computing services, which are largely driven by foreign service providers, challenge traditional tax norms, which evolved in the context of physical goods and territorial business presence. They also test the applicability of deeming provisions to tax it either as royalty or technical services fee under tax treaties, especially when cloud services are rendered without human intervention or direct sharing of know-how. While Indian tax authorities attempt to bring it within the tax net, the recent Delhi High Court judgment in Commissioner of Income-tax, International Taxation-1 v. Amazon Web Services held that such services being standardised automated services, do not constitute royalty and/or fees for technical / included services, and are hence not liable to tax in India.
