The Global Learning Revolution—But Who Pays the Tax?

In the digital age, education is no longer confined to classrooms. Online platforms like Coursera have transformed learning into a borderless experience—bringing Ivy League lectures to living rooms in Delhi or data science bootcamps to aspiring coders in Bengaluru. But amid this seamless delivery of knowledge lies a thorny question of international tax: should these revenues be taxed in India?

That’s the crux of the recent landmark decision of the Delhi High Court in Commissioner of Income-tax (International Taxation) v. Coursera Inc. (2025) 174 taxmann.com 1230 (Delhi). The case takes us deep into the interpretation of “fees for included services” (FIS) under Article 12 of the Indo-US Double Taxation Avoidance Agreement (DTAA) and what it truly means to “make available” technical knowledge.

This isn’t just a technical skirmish—it’s a precedent-setting battle over how global digital companies are taxed in India. Let’s unpack what really happened, why it matters, and what it tells us about the future of cross-border digital taxation.

The Core Question: Access vs. Advisory

Coursera Inc., a US-based company, operates a global online education platform. It partners with top universities and institutions to host their courses and allows users across the globe—including India—to access them for a fee.

Now here’s the problem the Indian Revenue authorities flagged: If Indian users are paying to access these services, shouldn’t Coursera pay tax in India on these earnings?

To justify taxation, the Revenue invoked two arms of Indian tax law and treaty interpretation:

1. Section 9(1)(vii) of the Income-tax Act, 1961 – which taxes "fees for technical services" (FTS).

2. Article 12(4) of the Indo-US DTAA – which allows taxing FIS if technical knowledge, skills, or processes are “made available” to the user.

The Assessing Officer (AO) believed that Coursera’s user services—like custom landing pages, usage analytics, and enterprise-level support—involved technical elements and even training. That, according to them, was enough to qualify as FIS under the treaty.

But was it?

What “Make Available” Really Means

Here lies the critical nuance. Under the Indo-US DTAA, not every technical service gets taxed. The defining condition is whether the service “makes available” technical knowledge or skills to the user so they can use it independently later.

Let’s simplify: Imagine a chef prepares a gourmet meal for you. That’s a service. Now imagine the same chef teaches you to cook the dish yourself. That’s “making available” know-how. Only the second is taxable under the DTAA.

The Tribunal and the Delhi High Court found that Coursera didn’t cross this line. It didn’t transfer any knowledge or skill to the users that they could use independently. The platform was simply a digital conduit—a bridge between educational institutions and learners.

Moreover, the courses were created by universities, not Coursera. Exams were conducted and certificates were issued by these institutions—not by Coursera. It merely enabled access, without imparting technical advice or training from its own side.

The Human Touch Argument: A Red Herring?

One of the Revenue’s key points was that Coursera offered support involving “human intervention,” such as training and customized user services. But the Court wasn’t convinced. It emphasized that such intervention, if not enabling independent use of knowledge, still doesn’t satisfy the “make available” requirement.

Even assuming some elements could be considered technical, they still didn’t result in the transfer of technical knowledge or skills. And without that transfer, the services fell outside the tax net of Article 12(4).

A Critical Blow to Overreach by the AO

Interestingly, the Dispute Resolution Panel (DRP) had earlier directed the AO to re-examine the nature of services based on the actual agreement Coursera had with an Indian client (Gandhi Institute of Technology and Management). But the AO largely ignored this direction and reiterated prior conclusions without deeper analysis.

The Tribunal rightfully criticized this failure, stating it undermined the statutory framework. It also exposed the contradictory stance of the AO—acknowledging Coursera as an aggregator while simultaneously trying to label it a technical service provider.

Real-World Implications: What This Judgment Signals

1. Stronger Guardrails on Taxing Digital Services This case draws a line in the sand—access-based models that don’t transfer knowledge will not be taxed as FIS under the Indo-US DTAA. That gives relief to platforms offering mere facilitation without active knowledge sharing.

2. Importance of Treaty Interpretation in Tech Economy The “make available” clause is a treaty-specific safeguard that can protect genuine service providers from overreach. Its strict interpretation ensures that only services meant to transfer technical capability are taxed.

3. Compliance Advice for Global Platforms For platforms operating in India under similar models—edtech, SaaS, even certain B2B services—this ruling emphasizes the need to clearly define the nature of services in contracts and ensure they don’t cross into FIS territory unintentionally.

4. Lessons for the Revenue Authorities The decision is also a lesson in procedural discipline. Ignoring DRP directions or stretching definitions without evidence may not stand up to judicial scrutiny. The Revenue must build its case on actual service delivery, not assumptions.

Conclusion: A Win for Clarity in an Age of Digital Ambiguity

As digital platforms redefine how services are consumed globally, tax laws must evolve with precision, not presumption. The Coursera judgment is not just about one company’s tax bill—it’s about how countries interpret cross-border digital services in an interconnected economy.

By reinforcing that mere access is not taxable and technical services must genuinely “enable” the recipient, this case sets a vital precedent. It puts a brake on aggressive taxation of digital business models and underscores the role of facts and treaty language in resolving tax disputes.

In a world where data flows are borderless but tax systems are not, such judicial clarity is both timely and necessary.