15 September 2010
No, TDS will not apply. Payments for use of standard facilities by the public at large in which some form of technical service is inherent are not covered under section 194J. It has also been held in the case of Skycell Communications Ltd. v. Deputy CIT[2001] 251 ITR 53 (Mad.).
When the assessee has availed the bandwidth services and other infrastructure for providing the internet access to its customers, the payment made by the assessee to VSNL, MTNL and other concerns for availing the services of the bandwidth network infrastructure cannot be said to be technical services within the meaning of section 194J read with Explanation 2 to clause (vii) of section 9(1) of the Income-tax Act. ITAT, MUMBAI BENCH `D’, MUMBAI Pacific Internet (India) Pvt. Ltd. v. ITO, Dated: December 23, 2008
CAclubindia
