Income Tax, Issue Update

Roaming charges paid to telecom operator: Scope of ‘Fees for Technical Services’ and applicability of Tax deduction at source.

Case: DCIT 8 (3)(1) vs. Tata Teleservices (Mah.) Ltd, Mumbai ITAT

Outcome: Assessee


  • The Assessee Company was engaged in the business of providing telecommunication services. It had paid roaming charges to various operators on which tax was not deducted at source.
  • The Assessing Officer was of the opinion that the roaming services were in the nature of technical services and the Assessee was required to deduct tax at source under section 194J of the Income Tax Act.

Key Points

  • The tribunal placed reliance on the decision of the coordinate Bench in Assessee’s own case, wherein it was concluded that human intervention is required only for installation/ repairing/ service/ maintenance/ capacity augmentation of the network. However, after completing this process, inter–connection between the operators, roaming is done automatically and does not require any human intervention. Hence, such service could not be construed as technical service so as to attract provisions of section 194J.
  • Therefore, the Assessee was justified in not deducting tax at source on roaming charges.

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