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Microsoft: Will support govt decision on software royalty law

BANGALORE: Microsoft, the world's largest software maker, which could possibly face a tax burden after the union government clarified its tax provisions relating to the use of packaged software, said the company will support whatever the government chooses to do in this regard.

"Right now, Microsoft is just evaluating and analyzing these things and we don't have a firm view on it. However, at the end of the day, tax is the law of the land and it's in our intention that we will comply with the law of the land", Sanket Akerkar, Managing Director, Microsoft Corporation India, told ET.

The issue had been raised by companies like Microsoft which sells its software products in India. Once passed in the parliament, the royalty law since 1976, could be in favor of authorities who have sought to tax income from the sale of software as royalty. This could result in additional tax burden for software firms like Microsoft, GE, Sonata Software.

Akerkar said the company is still analysing the exact implications of the amendment. "It is important for Microsoft to support what the Government of India chooses to do . The company is still trying to figure out what the implications could be and we would then see what can be done", he said.

Lawsuits are pending in courts across the country, including the Supreme Court, challenging the authorities who wanted to tax income from the sale of software as royalty. Experts had told ET that the amendment could impact at least 15 firms that are facing tax claims related to sale of software.


-TOI