BHAVIK (Senior Accountant) (37 Points)
20 September 2011I would like to know, whether we have to deduct TDS on payment for using TATA Internet Leased Line or Broad Band Line. Also let me know if there any case law for non deducting of TDS.
CA. Anuj Gupta
(Practices in NRI Int.Tax FEMA TP FDI/FIPB & FCRA)
(7024 Points)
Replied 20 September 2011
There is Delhi High Court Judgement in case of Bharti Airtel Ltd. which says that TDS is not to be deducted as there is no Technical Service involved in the same.
Anuj
+91-9810106211
femaquery @ gmail.com
sivakumar
(Asst Manager - F&A)
(324 Points)
Replied 22 September 2011
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 sophisticated 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 concerned 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 telephone 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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