Sowmya.S.Balan (Paid Assistant) (749 Points)
16 May 2012DEAr friends
We are doing business of developing software & providing software services .we have taken SMS facility from one party ( they charged service tax from us) and give promotional SMS service to our clients. Whether we have to deduct TDS before making payment to that party ? IF yes under which head ? kindly help us
Dipjyoti Majumdar
(CA in service & CS. dipmaj@ rediffmail.com )
(3469 Points)
Replied 16 May 2012
The issue appears to be not free from doubt. In my view, sending of sms is a service and not goods. Now if it is a service, would you deduct TDS under 194J or 194C. That is another mind boggling question.
Wait for further views.
Regards,
CA Manish Pawan
(Practicing Chartered Accountant)
(134 Points)
Replied 17 May 2012
It may be classified as Professional Service u/s 194J as well as Contracted Service u/s 194C. But I 'll recommend you to play safe and deduct TDS @ higher rate i.e. 10% u/s 194J to nullify any dissallowance by the IT department.
Dipjyoti Majumdar
(CA in service & CS. dipmaj@ rediffmail.com )
(3469 Points)
Replied 26 May 2012
Can the learned Friends further discuss on this please ?
Rgards,
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