ITAT says reinsurance premium is neither FTA nor royalty

Aditya Birla Sun Life Insurance paid reinsurance premiums to RGA International in Ireland and Munich Re in Germany without deducting tax at source. 

The Revenue treated the payments as taxable in India, alleging that the reinsurers had Indian PEs and that the payments constituted FTS or royalty. 

ITAT rejected both propositions, relying on earlier decisions that the Indian subsidiaries were not PEs and noting that the payments were purely reinsurance premiums, with no separate services provided to the assessee. The section 201 demand was therefore deleted.