Payments to bharti airtel

TDS provisions apply for contract for services whether it may be under 194C or 194J. With regard to telecommunication services, it is contract for purchase of Voice and Data signals at specified rate for a particular period but not a contract for service. Because you are not receiving any services directly from telecom companies as they don't devote their own time particularly for you and Indeed equipment devote its time to you(Indeed they devote their time to install such equipment for standard services to all users of their network). So with regard to payment for calling and surfing, no service u/s.194J exists but for Installation and repairs of your equipment if they collect charges then you are liable to deduct TDS u/s.194C(As per TDS provisions, TDS to be deducted u/s.194C for repairing machinery even though professional work involved to repair equipment)

Thanks, Nuli Swami Ayappa for your views. There is a school of thought that such payments might fall within the purview of Royalty particularly when the meaning of Royalty has been enlarged by Finance Act 2012 by way of insertion of Explanations. It falls within "Process".

Extracts of relevant discussion from VKs, Ready Reckoner is enclosed for ready reference. 

I invite further discussion on the matter please.

Regards,

If you observe the definition of royality in uploaded file by you, it clearly defined in 166.6-2 the term "Royality" as consideration for transfer of any right in respect of Process. We pay to telecom company for the use of signals arrived form the process they intalled.( i.e we are paying for the outcome of process) but not for Process itself. So we have a right over signals for which we have paid but not on Process. Interpretation of definition may be understood as follows

we want to set a telecom company where it is completely new to us. So we went to Reliance Telecom Services and ask them the process they followed to send and receive signals. Reliance want to reveal us if we pay 1Cr. Wepay one crore on condition that we will use the same process you followed. Reliance agree to us. In this case we pay them to use the process they followed i.e we dont get interrupted by Reliance if we use such process i.e we got a right on process followed by reliance. So from the above contention, we can say that Payment to Bharathi Airtel will not attract TDS provisions u/s.194J but u/s.194C. Thank You.