No Section 194J TDS on IUC charges paid by Telecom Operators

DCIT (TDS) Vs Vodafone India Ltd. (ITAT Mumbai)

The issue under consideration is whether interconnection usages charges (IUC) is in the nature of fees for technical services and whether the assessee is liable for TDS under section 194J of Income Tax Act, 1961?

ITAT states that the interconnection usages charges paid by the appellant to other telecom companies are not covered under ‘fee for technical service’ and such payments are out of the purview of TDS provision of 194J of the Act. There is no manual or human intervention involved in the process of interconnection charges. In fact it is common knowledge that when one of the subscribers in the assessee ‘s circle travels to the jurisdiction of another circle, the calls get connected automatically without any human intervention and it is for this, the roaming charges is paid by the assessee to the visiting operator for providing this service. The interconnection charges paid by the appellant to other telecom operators are therefore, not in the nature of fees for technical services and therefore there is no liability to deduct tax thereon.

Hence accordingly appeal filed by the revenue dismissed.

FULL TEXT OF THE ITAT JUDGEMENT

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