SECTION 194C

The Delhi High Court has held that the contract envisaged by the section 194C would be one under which one person merely renders certain services to the other person for consideration. It would not be possible to view the franchisee agreement as a contract for carrying out any work by the franchisee. The franchisee arrangement consists of mutual obligations and rights. The essence of such contract is one under which the trade name or reputation or know how belonging to the assessee is permitted to be made use of by the franchisees in different places for a monetary consideration.
Therefore, in case of franchisee arrangements, there would not be any obligation to deduction tax under section 194C