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ITA Nos. 522,& 523/ Del/2023 The Ld. AR submitted that the cloud computing services provided by the assessee are merely standard and automated services. The facility of different category of cloud computing services provided by the assessee as well as pricing, are all publically available online to anyone. Customers choose from the suite of services available what they need, when they need them. Instead of buying, owning and maintaining own data centres and servers, organisations can access standard and automated facilities as compute power, storage, data basis and other services on an as-needed basis. In this context, he explained that cloud computing services offered to the customers by the assessee are all standardised and there is no customisation for any one particular customer. While providing the standard and automated services / facility, AWS group / affiliates maintains its technology infrastructure in a secure environment and businesses / customers access these standard / common facility via the internet to develop and run their own applications. Capacity can grow or shrink instantly on demand and organisations only pay for what they use as per the terms of standard subscription plans / services offered.

7.1 In order to avail cloud computing services, the customer enters into a standard AWS customer agreement which authorises the customer to access the cloud computing services they opt for. The customers themselves are responsible for the development, content, operation, maintenance and use of the customer's content while availing the standard and automated cloud computing services. At no point, the customers have any physical access to or control over the equipment used in delivering these services.

7.1 Giving thoughtful consideration to the matter on record, the bench is of considered view that the cloud base services do not involve any transfer of rights to the customers in any process. The grant of right to install and use the software included with the subscription does not include providing any copy of the said software to the customer. The assessee's cloud base services are though based on patents/copyright but the subscriber does not get any right of reproduction. The services are provided online via data centre located outside India. The Cloud services merely facilitate the flow of user data from the front end users through internet to the provider's system and back. The Id. AO has fallen in error in interpreting it as licensing of the right to use the above Cloud Computing Infrastructure and Software (para 10.5 of the Ld. AO order). Thus the subscription fee is not royalty but merely a consideration for online access of the cloud computing services for process and storage of data or run the applications.

25. It is the case of the Ld. DR that the assessee is providing technical services to its customer particularly in the light of the terms used in the definition of "Service Offerings (AWS Site, AWS Marks, AWS Content)" and the support services provided by the assessee and also making available technology to its customers and hence the payments received by the assessee is taxable as FIS under Article 12(4) of the India-USA DTAA.

26. On the other hand, the Ld. AR has filed detailed rejoinder to the above allegations of the revenue inter alia submitting that the AWS content, documentation etc. are primarily akin to 'user manuals' to guide customers how to use AWS services which is purely incidental to the provision of AWS services and does not involve transfer of technology/technical plans/designs to the customers. Similarly, support services offered by the assessee do not enable the customer to recreate or provide the service itself and thus these services in no way make available any technical knowledge, skills, know-how etc. in relation to cloud computing. These services are in the form of general support, trouble shooting etc. which in no way resulted in transfer of technology or knowledge which enabled the customer to develop and provide cloud computing services on their own in future. AWS experts and highly trained engineers would use their expertise and knowledge to assist in troubleshooting errors experienced when customers are using the services and answering queries regarding features of AWS services, however it does not result in transmitting any technical knowledge to the customers. The ITA Nos. 522,& 523/ Del/2023 meaning of the term architectural guidance as envisaged by the Ld. DR is totally misplaced as it simply means providing guidance on how to use AWS products, features and services together and providing guidance on optimising AWS services and configuration to meet customer's specific means and thus in no way results in making available any technical knowledge or know how to the customers.