DIRECT TAXES
| Take expert view on TDS on port charges, SC tells CBDT Thu, 19 Aug 2010 22:31:37 GMT |
| The Economic Times Take expert view on TDS on port charges, SC tells CBDT NEW DELHI: The Supreme Court has directed the Central Board of Direct Taxes (CBDT) wing of revenue to take the expert opinion on the technical issue of interconnection between telecom service providers for the purposes of applicability of TDS on port charges. The court said the issue needs to be looked into from wider technical perspective and not merely on the basis of the Inconnect Agreements between service providers. “We are directing CBDT to issue directions to all its officers, that in such cases, the department needs not proceed only by the contracts placed before the officers”, said a bench comprising Chief Justice SH Kapadia and Justice KS Radhakrishnan in a significant order. The court said, “we do not know the constraints of the department but time has come when the department should understand that when the case involves revenue running into crores, technical evidence would help the Tribunals and Courts to decide matters expeditiously based on factual foundation”. The core issue before the court was whether manual intervention is involved in the technical operations by which a cellular service provider, like Bharti Cellular, is given the facility by state-owned BSNL/MTNL for interconnection? As a natural corollary, whether TDS was deductible by Bharti Cellular Limited when it paid interconnect charges/access/port charges to the PSU telecom service provider? The court noted, there was no expert evidence from the side of the department to show how human intervention takes place, particularly, during the process when calls take place, let us say, from Delhi to Nainital and vice versa. If, let us say, BSNL has no network in Nainital whereas it has a network in Delhi,the Interconnect Agreement enables Bharti Cellular Limited to access the network of BSNL in Nainital and the same situation can arise vice versa in a given case. During the traffic of such calls whether there is any manual ntervention, is one of the points which requires expert evidence. Similarly, on what basis is the "capacity" of each service provider fixed when Interconnect Agreements are arrived at? For example, we are informed that each service provider is allotted a certain "capacity". On what basis such "capacity" is allotted and what happens if a situation arises where a service provider's "allotted capacity" gets exhausted and it wants, on an urgent basis,"additional capacity"? Whether at that stage, any human intervention is involved is required to be examined, which again needs a technical data, apex court said. |
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