Applicability of TDS under section 194 J

[PAWAN KUMAR SHARMA]

TDS on Mobile and Telephone Payments

Dear All,   It has come to notice that persuant to change in definition of Royality as per Finance Act 2012, the payment of Mobile Bills, Broadband Charges, internet charges etc and Telephone Payments shall be after deduction TDS under section 194J.   Need you views on the same.

[Surender Gupta]

 

This issue need in depth study of the provisions as amended. Indeed amendment has far reaching consequences.

[Surender Gupta]

 

But as per common understanding, Mobile Bills, Broadband Charges, internet charges etc are not paid for use of equipment but these services are used / availed using the equipment as medium. The amount paid of services may not be held as used for equipment.

AI Summary

TDS applicability on telecom services questioned after royalty definition change; service payments may not require withholding. The issue asks whether payments for mobile, broadband, internet and telephone services fall within the amended definition of royalty and thereby attract TDS under the relevant provision; respondents advise detailed analysis of the amendment and note a practical view that these charges are payments for services using equipment as a medium, not payments for use of equipment, and so may not constitute royalty liable to withholding.