Commissioner of Income Tax v. Bharat Sanchar Nigam Ltd - TDS on interconnect usage charges

The Supreme Court held that interconnect usage charges paid by telecom operators to each other are not "royalty" under Section 9(1)(vi) read with Section 194J (fees for technical services). The Court distinguished between the right to use the network (technical service) and the actual use of the network (interconnect usage). Payments for interconnect usage do not involve any transfer of rights and are in the nature of service charges. This case established important principles for characterising payments as royalty vs. service fees for TDS purposes, relevant across multiple sectors.

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