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
16 May 2012
Such type of SMS services are automatically provided by machines by use of sophisticated technology and not by any human interface, it is not technical service and tds deduction U/s 194J is not applicable. Refer to case of CIT vs Bharati Cellular Ltd (2008). Due to this reason no tds is deductible on SMS services.Further no TDS is being deducted on telephone , mobile bill payments although service tax is charged on them.
CAclubindia
