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Recently, the Delhi High Court in the case of Indus Towers Ltd, dealt with an issue of whether the payment for telecom towers and network infrastructure services is to be treated as rent for premises and taxable at the rate of 10 per cent, or whether it is to be treated as rent for the use of the machinery, plant or equipment and liable for deduction of tax at 2 per cent. Alternatively, the transaction is covered under Section 194C of the Income-tax Act, 1961 as a contract payment. The High Court held that payment for telecom towers and network infrastructure services constitutes ‘rent’ for the use of machinery, plant or equipment which attracts withholding of tax at two per cent. The dominant intention of the transaction was the use of the equipment or plant or machinery and not the use of the premises which was incidental to such services.