1 day ago
Delhi HC Sends AWS ₹4,500 Crore Tax Case Back
The tax department wanted to look again at some payments made by Amazon Web Services in India.
These payments were worth more than ₹4,500 crore.
AWS said the payments had already been considered when its earlier tax bill was calculated.
The earlier calculation used AWS’s worldwide income and estimated the part connected to India.
The tax department said it still needed to check each payment separately.
The Delhi High Court did not decide the final tax question.
Instead, it cancelled the reassessment order and sent the issue back to the tax officer.
The officer must hear AWS and then reconsider the matter according to law.
The Delhi High Court set aside a reassessment order concerning AWS foreign remittances exceeding ₹4,500 crore.
The court sent the matter back to the assessing officer for fresh consideration and directed that AWS receive a personal hearing.
The tax department said its risk management system flagged transactions that may not have been covered in an earlier assessment involving about ₹2,966 crore.
AWS argued that its global income had already been examined and that India-attributable income was calculated proportionately.
The department sought transaction-wise reconciliation, while the court questioned what remained to be examined and whether AWS had a permanent establishment in India.
- Who
- Amazon Web Services Inc. and the income-tax department; the case was heard by a Delhi High Court division bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta.
- What
- The Delhi High Court set aside a reassessment order concerning foreign remittances exceeding ₹4,500 crore and sent the matter back for fresh consideration.
- Where
- The Delhi High Court in Delhi, India.
- When
- The ruling was delivered on Thursday; the reassessment notice was issued in March, with the year not specified in the article. It concerns assessment year 2020-21.
- Why
- The court said AWS should receive a personal hearing and an opportunity to explain whether the transactions had already been examined in the earlier assessment.
Amazon Web Services’ position
Income-tax department’s position
Whether the payments were already assessed
Amazon Web Services’ position
AWS argued that the earlier assessment examined its worldwide income and determined the portion attributable to India, so individual remittances could not simply be treated as newly escaped income.
Income-tax department’s position
The department said the earlier assessment did not prove that every transaction identified through its risk management system had been examined and requested a transaction-wise reconciliation.
Basis for further tax examination
Amazon Web Services’ position
AWS relied on the Delhi High Court’s 2025 ruling that certain cloud-service payments could not be treated as royalties under the India-US tax treaty, arguing that the taxability issue had already been settled.
Income-tax department’s position
The department said it had not yet been able to determine whether the payments were royalties, fees for technical services, or another form of taxable income because it had not received AWS’s response in the reassessment proceedings.
Scope of the reassessment
Amazon Web Services’ position
AWS questioned what remained to be assessed after the earlier officer reviewed its global financials and calculated India-attributable income.
Income-tax department’s position
The department sought to examine the flagged remittances and whether AWS had a permanent establishment in India, while the court also questioned the basis and jurisdiction for proceeding.
Key facts
- Amount under review
- Foreign remittances exceeding ₹4,500 crore
- Earlier assessment
- The earlier assessment involved about ₹2,966 crore in foreign remittances.
- Assessment year
- 2020-21
- Court action
- The reassessment order was set aside and remanded to the assessing officer.
- AWS position
- AWS said its global income had already been examined and its India-attributable income calculated proportionately.
- Tax department position
- The department sought transaction-wise reconciliation and said it had not determined whether the payments were royalties, fees for technical services, or another form of taxable income.
- Earlier cloud-services ruling
- The Delhi High Court held in 2025 that certain cloud-computing payments from Indian entities could not be treated as royalties under the India-US tax treaty.
Quotes
Delhi High Court
The division bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta hearing AWS’s plea.
“The department hasn’t gone on individual remittances. They have assessed my global income in the United States on a proportionate basis across the globe. What is left to be assessed? … What is left to be assessed in India?”
livemint.com
“The assessing officer shall thereafter fix a date for personal hearing and, if the assessee is represented, hear the authorised representative and consider the response in accordance with law.”
livemint.com
Sources
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