The revenue-starved government will have to cough up tens of thousands of crores of rupees over the next few months towards honouring the claims of refunds of the 10% ‘royalty tax’ to scores of non-resident software suppliers to Indian companies, following Tuesday’s Supreme Court (SC) ruling, tax experts said.

Companies importing software for sale have since 1998 been required to deduct the tax payable by the foreign software provider without a permanent establishment in India. While a sections of these importers have complied with the TDS obligation, others have been contesting the tax notices in various forums including tax tribunals and courts. Tax experts said that while a precise estimate of the aggregate TDS amount is not immediately available, they said the refunds, including interest accrued, could add up to Rs 50,000 crore or more.