We pay a foreign registrar to register our domain names. Is that royalty, and must we withhold?
No, it is not royalty. A registrar has no proprietorship rights in the domain name it registers for a customer, so it cannot confer or transfer a right to use that name — and without a right to use there is nothing to characterise as royalty under s.9(1)(vi) or Article 12(3)(a) of the India-US treaty. The Delhi High Court allowed the assessee's appeal, reversing the Tribunal, which had held the receipts were royalty because a domain name is an intangible similar to a trademark.
Decided by the High Court (Delhi High Court — Rajiv Shakdher and Girish Kathpalia, JJ. (judgment delivered by Rajiv Shakdher, J.); IT Appeal Nos. 891 of 2018, 261 of 2019 and 75 of 2023) on 2023-12-11, reported as [2023] 157 taxmann.com 256 (Delhi)(HC); IT Appeal Nos. 891 of 2018 (AY 2013-14), 261 of 2019 (AY 2014-15) and 75 of 2023 (AY 2015-16). The further citations (2024) 337 CTR 321 and (2025) 483 ITR 515 do not appear on the report's citation line and are not corroborated here.. It bears on section 9(1)(vi), section 260A, section Article 12(3)(a) India-US DTAA of the Income Tax Act 1961, in Assessment & Scrutiny and TDS Defaults matters.
It closes the gap between Engineering Analysis, which is about software, and the everyday remittance to a foreign registrar or host. The department's counter is the Tribunal's own reasoning below — a domain name is an intangible akin to a trademark, so payment for it is royalty under Explanation 2 to s.9(1)(vi) — and this decision answers it by looking at what the registrar actually owns rather than at what a domain name is. The distinction the case turns on is registrar versus owner, and it is worth pleading in that order.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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Godaddy.Com LLC, a US company, facilitates the registration and transfer of generic top-level domains such as .com, .net, .org and .info, and provides the same service for country code top-level domains including .us, .ca, .mx, .fr, .it, .de and .es. The department assessed the fees it received for domain name registration as royalty under s.9(1)(vi) and Article 12(3)(a) of the India-US treaty. The Delhi Tribunal upheld that view for assessment year 2013-14 in ITA No. 1878/Del/2017, decided 3 April 2018, holding that rendering services for domain registration is rendering services in connection with the use of an intangible property which is similar to a trademark, so that the charges were royalty within Explanation 2 to s.9(1)(vi). The assessment years in issue before the High Court are 2013-14 to 2015-16.
The appeals were allowed and the common question of law answered in favour of the assessee: the fee received for registering domain names for its customers cannot be treated as royalty. The Tribunal's order sustaining the addition was set aside. The route is ownership. Clause 3.5 of the accreditation agreement with ICANN shows that the assessee, acting as registrar, disclaims all rights to exclusive ownership or use of the data elements listed in sub-clauses 3.2.1.1 to 3.2.1.3 for the registered names it submits to the registry database, and the agreement with its own customers records that registration of a domain name creates no proprietary right in the registrar, the customer or anyone else. Not being the owner of the domain name, the assessee could not confer or transfer a right to use it, and royalty depends on such a grant. The Court also held that the Tribunal's reliance on Satyam Infoway v. Siffynet Solutions was misconceived: that decision was concerned with the rights of the domain name owner and not of the registrar. It accepted that a domain name may in a given situation have the attributes of a trademark, but held that the principle would have been attracted only if the assessee had granted or transferred rights in its own domain name, Godaddy.com, to a third person.
The Court began from the undisputed facts (paragraph 12): the assessee is based in the United States, has no permanent establishment or fixed place of business in India, and provides domain registration, web design and web hosting. Its web hosting and web design receipts of Rs 20,42,77,864 had been recharacterised by the Assessing Officer as fees for technical services and taxed at 10 per cent, which the assessee did not contest; what was in issue was Rs 17,41,54,636 received for domain registration services. The Court recorded expressly that the assessee was not seeking the benefit of the treaty, so the question was one of ownership under the domestic definition. It then described how the registration works (paragraphs 14 to 14.9): a customer requests a name, the assessee checks with the registry whether it is already taken, and on payment enters into an agreement with the customer, the fee being shared three ways between the assessee, ICANN and the registry. Reading clauses 1.17, 1.22 and 3.5 of the 2013 accreditation agreement with ICANN, the Court held that clause 3.5 establishes in no uncertain terms that a registrar has given up exclusive ownership or use of the listed data elements and so has no proprietorship rights in the domain name (paragraph 15); the customer agreement put it beyond doubt by providing that registration creates no proprietary right in anyone (paragraphs 15.1 and 15.2). From that the submission that the assessee, not being the owner, could not confer or transfer a right to use the name 'deserves acceptance' (paragraph 15.3). On the trademark analogy the Court accepted that a domain name may in a given case have the attributes of a trademark, but held that Satyam Infoway was concerned only with the rights of the domain name owner and not of the registrar, so the Tribunal's reliance on it was misconceived (paragraphs 16 to 16.2), and that the principle would have been attracted only if the assessee had granted rights in its own domain name to a third person (paragraph 16.4).
The aforementioned principle may have been attracted if the appellant/assessee had granted rights in or transferred the right to use its domain name, i.e., Godaddy.com, to a third person. Therefore, the fee received by the appellant/assessee for registration of domain names of third parties, i.e., its customers, cannot be treated as royalty.
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Handle my notice → Ask a CA on WhatsAppNo, it is not royalty. A registrar has no proprietorship rights in the domain name it registers for a customer, so it cannot confer or transfer a right to use that name — and without a right to use there is nothing to characterise as royalty under s.9(1)(vi) or Article 12(3)(a) of the India-US treaty. The Delhi High Court allowed the assessee's appeal, reversing the Tribunal, which had held the receipts were royalty because a domain name is an intangible similar to a trademark. This was decided by the High Court (Delhi High Court — Rajiv Shakdher and Girish Kathpalia, JJ. (judgment delivered by Rajiv Shakdher, J.); IT Appeal Nos. 891 of 2018, 261 of 2019 and 75 of 2023) and bears on section 9(1)(vi), section 260A, section Article 12(3)(a) India-US DTAA of the Income Tax Act 1961. It is reported as [2023] 157 taxmann.com 256 (Delhi)(HC); IT Appeal Nos. 891 of 2018 (AY 2013-14), 261 of 2019 (AY 2014-15) and 75 of 2023 (AY 2015-16). The further citations (2024) 337 CTR 321 and (2025) 483 ITR 515 do not appear on the report's citation line and are not corroborated here.. It closes the gap between Engineering Analysis, which is about software, and the everyday remittance to a foreign registrar or host. The department's counter is the Tribunal's own reasoning below — a domain name is an intangible akin to a trademark, so payment for it is royalty under Explanation 2 to s.9(1)(vi) — and this decision answers it by looking at what the registrar actually owns rather than at what a domain name is. The distinction the case turns on is registrar versus owner, and it is worth pleading in that order. If it applies to you, the first step is this: Put the registrar's accreditation agreement on record; the Court decided on its clauses 3.2.1.1, 3.2.1.3 and 3.5, not on the invoice description.
Godaddy.Com LLC, a US company, facilitates the registration and transfer of generic top-level domains such as .com, .net, .org and .info, and provides the same service for country code top-level domains including .us, .ca, .mx, .fr, .it, .de and .es. The department assessed the fees it received for domain name registration as royalty under s.9(1)(vi) and Article 12(3)(a) of the India-US treaty. The Delhi Tribunal upheld that view for assessment year 2013-14 in ITA No. 1878/Del/2017, decided 3 April 2018, holding that rendering services for domain registration is rendering services in connection with the use of an intangible property which is similar to a trademark, so that the charges were royalty within Explanation 2 to s.9(1)(vi). The assessment years in issue before the High Court are 2013-14 to 2015-16. The matter was decided on 2023-12-11 by the High Court (Delhi High Court — Rajiv Shakdher and Girish Kathpalia, JJ. (judgment delivered by Rajiv Shakdher, J.); IT Appeal Nos. 891 of 2018, 261 of 2019 and 75 of 2023). On those facts the High Court held as follows. The appeals were allowed and the common question of law answered in favour of the assessee: the fee received for registering domain names for its customers cannot be treated as royalty. The Tribunal's order sustaining the addition was set aside. The route is ownership. Clause 3.5 of the accreditation agreement with ICANN shows that the assessee, acting as registrar, disclaims all rights to exclusive ownership or use of the data elements listed in sub-clauses 3.2.1.1 to 3.2.1.3 for the registered names it submits to the registry database, and the agreement with its own customers records that registration of a domain name creates no proprietary right in the registrar, the customer or anyone else. Not being the owner of the domain name, the assessee could not confer or transfer a right to use it, and royalty depends on such a grant. The Court also held that the Tribunal's reliance on Satyam Infoway v. Siffynet Solutions was misconceived: that decision was concerned with the rights of the domain name owner and not of the registrar. It accepted that a domain name may in a given situation have the attributes of a trademark, but held that the principle would have been attracted only if the assessee had granted or transferred rights in its own domain name, Godaddy.com, to a third person.
The Court began from the undisputed facts (paragraph 12): the assessee is based in the United States, has no permanent establishment or fixed place of business in India, and provides domain registration, web design and web hosting. Its web hosting and web design receipts of Rs 20,42,77,864 had been recharacterised by the Assessing Officer as fees for technical services and taxed at 10 per cent, which the assessee did not contest; what was in issue was Rs 17,41,54,636 received for domain registration services. The Court recorded expressly that the assessee was not seeking the benefit of the treaty, so the question was one of ownership under the domestic definition. It then described how the registration works (paragraphs 14 to 14.9): a customer requests a name, the assessee checks with the registry whether it is already taken, and on payment enters into an agreement with the customer, the fee being shared three ways between the assessee, ICANN and the registry. Reading clauses 1.17, 1.22 and 3.5 of the 2013 accreditation agreement with ICANN, the Court held that clause 3.5 establishes in no uncertain terms that a registrar has given up exclusive ownership or use of the listed data elements and so has no proprietorship rights in the domain name (paragraph 15); the customer agreement put it beyond doubt by providing that registration creates no proprietary right in anyone (paragraphs 15.1 and 15.2). From that the submission that the assessee, not being the owner, could not confer or transfer a right to use the name 'deserves acceptance' (paragraph 15.3). On the trademark analogy the Court accepted that a domain name may in a given case have the attributes of a trademark, but held that Satyam Infoway was concerned only with the rights of the domain name owner and not of the registrar, so the Tribunal's reliance on it was misconceived (paragraphs 16 to 16.2), and that the principle would have been attracted only if the assessee had granted rights in its own domain name to a third person (paragraph 16.4). In the words reproduced by the source cited on this page: "The aforementioned principle may have been attracted if the appellant/assessee had granted rights in or transferred the right to use its domain name, i.e., Godaddy.com, to a third person. Therefore, the fee received by the appellant/assessee for registration of domain names of third parties, i.e., its customers, cannot be treated as royalty."
It was decided by the High Court on 2023-12-11 and is reported as [2023] 157 taxmann.com 256 (Delhi)(HC); IT Appeal Nos. 891 of 2018 (AY 2013-14), 261 of 2019 (AY 2014-15) and 75 of 2023 (AY 2015-16). The further citations (2024) 337 CTR 321 and (2025) 483 ITR 515 do not appear on the report's citation line and are not corroborated here.. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 9(1)(vi), section 260A, section Article 12(3)(a) India-US DTAA, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The appeals were allowed and the common question of law answered in favour of the assessee: the fee received for registering domain names for its customers cannot be treated as royalty. The Tribunal's order sustaining the addition was set aside. The route is ownership. Clause 3.5 of the accreditation agreement with ICANN shows that the assessee, acting as registrar, disclaims all rights to exclusive ownership or use of the data elements listed in sub-clauses 3.2.1.1 to 3.2.1.3 for the registered names it submits to the registry database, and the agreement with its own customers records that registration of a domain name creates no proprietary right in the registrar, the customer or anyone else. Not being the owner of the domain name, the assessee could not confer or transfer a right to use it, and royalty depends on such a grant. The Court also held that the Tribunal's reliance on Satyam Infoway v. Siffynet Solutions was misconceived: that decision was concerned with the rights of the domain name owner and not of the registrar. It accepted that a domain name may in a given situation have the attributes of a trademark, but held that the principle would have been attracted only if the assessee had granted or transferred rights in its own domain name, Godaddy.com, to a third person. It arises in Assessment & Scrutiny and TDS Defaults matters, on section 9(1)(vi), section 260A, section Article 12(3)(a) India-US DTAA of the Income Tax Act 1961, and was decided by Delhi High Court — Rajiv Shakdher and Girish Kathpalia, JJ. (judgment delivered by Rajiv Shakdher, J.); IT Appeal Nos. 891 of 2018, 261 of 2019 and 75 of 2023. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Frame the argument as an absence of proprietorship — the payee cannot grant a right to use what it does not own — rather than as a debate about whether a domain name is an intangible. Distinguish registration services from hosting, content delivery and other bundled services in the contract and in the remittance, because this decision covers registration. Keep the Tribunal's contrary decision in view when advising on past years and on other registrars, since the point was litigated both ways in Delhi.
Still good law. The judgment is for assessment years 2013-14 to 2015-16 and has been applied since. A report of the Delhi Tribunal's order in ITA No. 335/Del/2025 dated 30 April 2025, for assessment year 2022-23, records that the Tribunal reiterated the High Court's view in the assessee's own case for assessment years 2013-14 to 2015-16 that receipts for domain registration are not royalty; that is taken from the report of the order and not from the order itself. To the same effect is GoDaddy.com, LLC v. ACIT (International Taxation) (2025) 123 ITR 29 / 170 taxmann.com 408 (Delhi)(Trib.), 1 January 2025, for assessment years 2016-17 to 2019-20 and 2021-22, holding that the assessee 'merely acted as a registrar and could not grant any right to use the domain names'; that citation and date are confirmed on a subscription case-law database, though the order was not opened. Nothing was found doubting, distinguishing or overtaking the decision, and no source found records an application for special leave. One correction to what stood here. The holding does not rest on Article 12(3)(a) of the India-USA DTAA. Paragraph 12(vii) records that the assessee was not seeking the benefit of the treaty at all, even while contesting the charge, so the decision turns on ownership and on the domestic definition of royalty; the Assessing Officer had invoked both limbs but the Court decided the case without the treaty, and this is not authority on Article 12(3)(a). The department's page for s.9 of the 1961 Act carries amendment footnotes running only to the Finance (No. 2) Act, 1991, so the current domestic text of s.9(1)(vi) could not be settled from it and should be taken from elsewhere. One lead is open: a later Delhi High Court decision in the assessee's own name is reported at [2026] 184 taxmann.com 4 (Delhi), 4 February 2026, and was not opened, so nothing is said here about what it decides. That finding was checked against a published source, which is linked on this page, on 2026-08-24. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The judgment has now been read in full in a subscription case-law database and several statements in the earlier note are withdrawn. It was delivered on 11 December 2023 by Rajiv Shakdher and Girish Kathpalia, JJ., Shakdher, J. delivering it, in IT Appeal Nos. 891 of 2018, 261 of 2019 and 75 of 2023 for assessment years 2013-14, 2014-15 and 2015-16 respectively; the judges are named and the date is fixed. The sentence quoted below is the Court's own at paragraph 16.4 — the version previously carried had been altered from 'the appellant/assessee' to 'the assessee', and it has been corrected and given with the conditional sentence that precedes it. Three things no secondary account carried. The Court records at paragraph 12(vii) that the assessee was not seeking the benefit of the treaty, so the decision turns on the domestic definition of royalty and on ownership, not on Article 12(3)(a), although the Assessing Officer had invoked both. Paragraph 12 also answers what the receipts were treated as instead: the web hosting and web design income of Rs 20,42,77,864 had been recharacterised by the Assessing Officer as fees for technical services and taxed at 10 per cent, uncontested, while the domain registration fee actually in issue was Rs 17,41,54,636. And paragraph 12(ii) records that the assessee has no permanent establishment or fixed place of business in India. The decision set aside the Tribunal's order in Godaddy.com LLC v. Asstt. CIT [2018] 92 taxmann.com 241 / 170 ITD 217 (Delhi - Trib.). The citation line carries only [2023] 157 taxmann.com 256 (Delhi); the CTR and ITR references previously recorded here are not on it and remain uncorroborated. On the earlier note about corroboration: the KPMG note does not name the assessee, so it corroborates the proposition and not the identity of the case, and a circulated list describing this case as a business-income decision is wrong — the holding is that the receipts cannot be treated as royalty, not that they are business income. It does not decide the withholding position of the Indian payer, and it does not decide the treatment of bundled hosting and design services beyond recording that the assessee did not contest their recharacterisation as fees for technical services. It does not say what head the domain registration receipts fall under if they are not royalty. Because the assessee expressly did not invoke the treaty, the judgment is not authority on Article 12(3)(a). And a later Delhi High Court decision in the assessee's own name, [2026] 184 taxmann.com 4 (Delhi) of 4 February 2026, has not been read, so the position for later years is not stated here. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The appeals were allowed and the common question of law answered in favour of the assessee: the fee received for registering domain names for its customers cannot be treated as royalty. The Tribunal's order sustaining the addition was set aside. The route is ownership. Clause 3.5 of the accreditation agreement with ICANN shows that the assessee, acting as registrar, disclaims all rights to exclusive ownership or use of the data elements listed in sub-clauses 3.2.1.1 to 3.2.1.3 for the registered names it submits to the registry database, and the agreement with its own customers records that registration of a domain name creates no proprietary right in the registrar, the customer or anyone else. Not being the owner of the domain name, the assessee could not confer or transfer a right to use it, and royalty depends on such a grant. The Court also held that the Tribunal's reliance on Satyam Infoway v. Siffynet Solutions was misconceived: that decision was concerned with the rights of the domain name owner and not of the registrar. It accepted that a domain name may in a given situation have the attributes of a trademark, but held that the principle would have been attracted only if the assessee had granted or transferred rights in its own domain name, Godaddy.com, to a third person.
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