India Supreme Court Clarifies Tax Deductions Liability Under Franchise, Distributorship Agreement

The Indian Supreme Court Feb. 28 clarified the tax deductions liability under franchise and distributorship agreement. The taxpayer, mobile telephone service providers, disputed the deduction of tax at source on commission payable to an agent under the franchise and distributorship agreement according to the the Income Tax Act. On appeal, the Supreme Court ruled that: 1) the taxpayer wasn’t liable to deduct tax at source; and 2) Section 194-H of the Act wasn’t applicable to this case. [India, Supreme Court, 02/28/24]

Reference: View Supreme Court Judgement, Civil Appeal No. 7257 of 2011. View Index.