26 December 2009
Sir, Today Idea, Airtel, Tata Indicom etc. charged bills with including service tax. In the bill, they have mentioned seperate service tax. Huge amounts of bills paid by various organisations for monthly bills. My question is why we should not deduct TDS from the bill amount of the private mobile service provider. If any provision in the act to do not deduct the TDS Amount? Mobile service provider is take a special concession regarding TDS. Not any remark mentioned on the telephone bill of the compnay regarding TDS.
26 December 2009
1) There is no difference between BSNL and Private Operators. Both are Limited Companies. BSNL may be owned by Government but essentially it is a company and not a Government Corporation to be exepmted from TDS.
2) Refer to the Tamilnadu HC Judgement of Aircel. Provisioning of mobile calls or calls is neither a contract nor a technical service.
If at all TDS is applicable on this service, you can differentiate only between Government and Private and not Government owned company and Private owned company. It has to be a level playing field.
28 December 2009
Three types of openions received. But I am not satisfied for this answer. Because there is no legal support or any lawful base to this answer. Please this query may be resolved any CA expert with circular or notification or act base answer.
28 December 2009
You can only get hold of the copy of judgement in the Aircel Case and use that itself. There is no circular / notification / clarification from department. There is no difference between BSNL and other operators. All are limited companies and if you have to deduct anything on payment to others you have to deduct on payment to BSNL also. You do not need a circular for that as like others BSNL to is a limited company incorporated under companies Act.
Now for the TDS portion, telecommunication services does not fall under definition of work u/s 194C. It does not fall under definition of technical services as you are paying per call and that is not a technical service. That has also been vetoed by the court in Aircel judgement. The telecom companies do not bill you for RENTAL. They bill you for MINIMUM CHARGES FOR CALLS and per call over and above the number of calls for which you pay minimum charges.
02 February 2010
Telephone services are not covered - When a person decides to subscribe to a cellular telephone service in order to have the facility of being able to communicate with others, he does not contract to receive a technical service. What he does agree is to pay for the use of the airtime for which he pays a charge. The fact that the telephone service provider has installed sophistiÂcated technical equipment in the exchange to ensure connectivity to its subscriber does not on that score make it provision of a technical service to the subscriber. The subscriber is not conÂcerned with the complexity of the equipment installed in the exchange, or the location of the base station. All that he wants is the facility of using the telephone when he wishes so, and being able to get connected to the person at the number to which he desires to be connected. What applies to cellular mobile teleÂphone is also applicable to fixed telephone service. Neither service can be regarded as ‘technical service’ for the purpose of section 194J of the Act - Skycell Communications Ltd. v. Dy. CIT [2001] 251 ITR 53 (Mad.).
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