Bandwidth Capacity – Taxability and Controversy

With the advent of globalization, transfer of data has become one of the most crucial factors in the successful running of governments and companies alike. With the increasing need for transfer of data, telecommunications operators across the globe are under acute pressure to provide high speed secure data flow with minimal interruptions. The capacity of a device to transmit data, including the speed of such transmissions, is technically understood as “bandwidth”. The taxability of payments made for the transfer or use of bandwidth capacity has been the subject of debate in a series of income tax disputes in India.