The Mumbai Income Tax Appellate Tribunal (ITAT) recently issued a decision on whether payments for online banner advertisements are subject to tax deducted at source. The case involved an online gaming platform operator in India, Play Games 24X7 Private Limited, that made payments for online banner advertisements on Facebook, which involved the use of an online interface provided by Facebook to input the advertisement information. The payments were made to Facebook Ireland, which processed and uploaded the advertisements on its server. In making the payments for advertising, Play Games 24X7 did not deduct (withhold) tax at source. In assessing Play Games 24X7, however, the assessing officer determined that tax should have been deducted at source and disallowed the deduction of the advertising expense. The position of the assessing officer was subsequently upheld by the Commissioner of Income-tax (Appeals).
Source Orbitax
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