Amazon Wins Tax Battle: Delhi HC Says AWS Cloud Services Not Taxable as Royalty or Technical Fees

The Delhi High Court ruled that payments made by Indian Companies to Amazon Web Services (AWS) for standardised cloud computing services are not taxable as royalty or fees for technical services (FTS) under the Income Tax Act, 1961, or the India–US Double Taxation Avoidance Agreement (DTAA). 

The court found that AWS provides automated, self-service cloud access without transferring intellectual property, know-how, or control over infrastructure to its customers.

Therefore, such payments do not constitute royalties or FTS.

This decision upholds the findings of the Income Tax Appellate Tribunal (ITAT) in the case of CIT v. Amazon Web Services and is expected to have significant implications for the taxation of digital services in India.