Coursera Income Not Taxable as FTS/FIS under India-US DTAA: Supreme Court upholds Delhi HC Ruling [Read Order]

In a recent ruling, the Supreme Court dismissed the Revenue’s challenge against the Delhi High Court’s decision that Coursera Inc.’s India-sourced income does not qualify as “Feesfor Technical Services” or “Fees for Included Services” under Article 12 of the India-US DTAA.

The Special Leave Petition in the Supreme Court was filed by the Commissioner of Income Tax (International Taxation)-1, New Delhi, challenging the Delhi High Court’s decision that had ruled in favor of the assessee, Coursera Inc.

The dispute centered around whether Coursera’s India-sourced revenue from its online learning platform constituted “Fees for Included Services” (FIS) under Article 12 of the India-USA Double Taxation Avoidance Agreement (DTAA).

In the high court proceedings, the central argument revolved around whether Coursera Inc.’s India-sourced income qualified as “Fees for Technical Services” (FTS) or “Fees for Included Services” (FIS) under Article 12 of the India-US DTAA.

Also, they asserted that it merely operated a platform hosting courses created by third-party universities and companies, and did not itself provide any technical knowledge, skill, or know-how that users could independently apply.

On the other hand, the revenue contended that Coursera’s customized user services such as personalized landing pages, enterprise-level support, and training, amounted to technical services that were “made available” to Indian users, thereby attracting tax under Section 9(1)(vii) of the Income Tax Act.

The High Court, in its May 2025 ruling, noted that the Assessing Officer had failed to properly examine the agreement with Gandhi Institute of Technology and Management. Instead, the AO reiterated prior findings without fresh analysis, leading to a flawed final assessment order. The high court found no wrong in the ITAT’s factual findings and dismissed the Revenue’s appeal.

Based on a special leave petition filed by the revenue, the Supreme Court, led by Justices Pamidighantam Sri Narasimha and Alok Aradhe, condoned the delay in filing but declined to interfere with the High Court’s judgment, effectively closing the matter. The ₹75.66 crore addition to Coursera’s income for AY 2020-21 now stands nullified.

Accordingly, the Special Leave Petition was dismissed.

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