The provision of roaming services do not require any human intervention and accordingly, cannot be construed as technical services. Thus, payment of roaming charges by telephone operator does not fall under the ambit of TDS provisions under section 194J.
IT : In the absence of human intervention, the roaming facility does not fall under the definition of 'work' as defined in section 194C and, hence, the provisions of section 194C are not applicable on payment of roaming charges by telephone operator.
IT : The assessee cannot be said to have used the equipment which is involved in providing the roaming facility. The assessee collects the roaming charges from its subscriber and passes it on to the other service provider. Thus, such payment made by telephone operator does not fall under the ambit of TDS provisions under section 194-I.
• The disputed issue was:
Whether sum paid by telecom operator towards roaming facility provided by other telecom operators would be liable to TDS either under section 194J or section 194C or section 194-I?
The Tribunal held as under:
A. On applicability of section 194-J
• Human intervention is required only for installation/setting up/repairing/servicing/maintenance /capacity augmentation of the network. But after completing this process, mere interconnection between the operators while roaming, is done automatically and does not require any human intervention and, accordingly, cannot be construed as technical services.
• It is common knowledge that when one of the subscribers in the assessee's circle travels to the jurisdiction of another circle, the call gets 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. Hence we have no hesitation to hold that the provision of roaming services do not require any human intervention and accordingly we hold that the payment of roaming charges does not fall under the ambit of TDS provisions u/s 194Jof the Act.
B. On applicability of section 194C
• Provisions of section 194C would become applicable only where some work (works contract) is being carried out and there is some human intervention involved in the carriage of such work. For carrying out any work, manpower is sine qua non and without manpower, it cannot be said that work has been carried out.
• The word 'work' in section 194C referred to and comprehends only the activities of workman. It is the physical force which has comprehended in the word 'work'. We have already held that the payment of roaming charges does not require any human intervention. Hence, in the absence of human intervention, the services rendered in the context of the impugned issue does not fall under the definition of 'work' as defined in section194C and, hence, the provisions of section 194C are not applicable to the impugned issue.
C. On applicability of Section 194-I
• For applicability of section 194-I the real test to be considered is whether it is possible to say that it is the assessee who has used the equipment and has paid the roaming charges to the other service provider with whom it has entered into a national roaming agreement. We hold that it is not possible to say so because if at all anyone can be said to have used the equipment it can only be the subscriber of the assessee but not the assessee. If anything the assessee is placed in a position of a mere facilitator between its subscriber and the other service provider, facilitating a roaming call to be made by the subscriber.
• The assessee cannot be said to have used the equipment which is involved in providing the roaming facility. The assessee collects the roaming charges from its subscriber and passes it on to the other service provider.
• It is relevant at this juncture to get into the judgment of the apex court in the case of BSNL and Another v. Union of India and Others [2006] 282 ITR 273 (SC). One of the questions which arose for consideration was whether there was any transfer of a right to use any goods by providing access or telephone connection by the telephone service provider to a subscriber. The Supreme Court posed to itself the question whether the electromagnetic waves through which the signals are transmitted can fulfil the criteria for being described as "goods". It held that the electromagnetic waves cannot be called goods. Thus, the payment of roaming charges by the assessee to other service provider cannot be considered as rent within the meaning of section 194I of the Act
