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Tax Publishers
Payment aggregator whether he is the person liable
to withhold Tax as person liable to pay?
Facts:
Uber
India was rendering payment aggregator and marketing services for Uber BV
Netherlands who owned the Uber application. Using the Uber application drivers
and restaurants enter into a contract with Uber BV and payments to the drivers
and the restaurants for Uber Eats were paid either directly by the
customer or through Uber India as a payment collector. It was the case of the
AO that Uber India was liable to withhold TDS for the payments made by the
customers to Uber India routed thru their App and in turn paid to the drivers
and restaurants as a payment aggregator. On appeal the CIT(A) negated the views
of the AO holding that Uber India can never be the payer or the person liable
to pay as the responsibility was of the end customer factually. On higher
appeal by the revenue -
Held
against the revenue that Uber India could not be held as an assessee in default
as they were not the person liable to pay as per section 204.
Ed. Note:
The appeal has a fine print in it that Uber BV was not paying equalization levy
either under section 165A as alleged by the revenue to be noted. The issue is
vexed as it is impossible for the aggregator to enter into contracts with the
drivers and with the restaurants as that invariably is the work/purpose of Uber
BV or the App. Whether the amendment vide Finance act, 2020 in section 204(v)
"defining a person responsible for paying" will also include an agent
of a non-resident under section 163 as well how far can it circumference Uber
India in the coming assessment years needs to be seen.
Case: Dy. CIT v. Uber India Systems (P.) Ltd. 2023 TaxPub(DT) 2462
(Mum-Trib)
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