Tds issues u/s 194j, 194c & 194i

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 December 2012 Dear All,

I have come across some tds typical issues as given under

1. Applicability of tds on credit card swiping charges debited by bank(merchant discount)
2. TDS on processing fee debited by bank while disbursing the loan
3.Applicability of tds on internet charges(even when there is no agreement)

pls clarify me above queries in the lite of any case laws.

T&R
Srinivas Reddy

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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17 December 2012 TDS is not deductible on services using technology -- telephone charges, Internet charges, cable TV, leased lines. 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.).

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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17 December 2012 TDS is also not requireed to be deducted on commission/ credit card swipe charges levied by bank.
Bank is not acting as agent of the customer , it is the service charges for using the POS.

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Querist : Anonymous

Querist : Anonymous (Querist)

17 December 2012 Thank u Mr.Kedia,

Pls can quote any case law for queries on processing fee and swiping charges

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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17 December 2012 Till now, I dont think any case law is there on such transaction of swiping because recently AO has surveyed HDFC Bank and issued notices to many companies but it will not succeed in his contention.