Roaming Charges Paid by Service Provider Not Subject to Taxation

The Income-tax Appellate Tribunal (ITAT), Mumbai, in an order on December 22 on an appeal filed by Vodafone Essar declared that roaming charges paid by one service provider to another are not liable for deduction of tax at source. ITAT held that the service provider's role is limited to collecting the roaming charges from its subscriber and pass it on to the other service provider whose facility is used by the subscriber and therefore the service provider is not required to deduct tax. The Tribunal also held that tax payer company is only a facilitator between the subscriber and the other service providers thereby enabling the subscriber to make a roaming call.

National roaming charge is a specific charge which is paid by a subscriber of a cellular network to gain access to services of any other network operator in their licensed area of operation.