Please Help: TDS

i am working with construction company and my company is engaged in developing town cities
to promote our business company is paying amount Rs 1123600 i.e bill amount rs 1000000 and service tax 123600 service tax
the amount is so pail to data base marketing company who is sending bulk sms to general public to promote our business.
our company directors says this is in the nature of service since the data base marketing company charging service tax
but our auditors make a point since the amount so charged is for sms hence it is in the nature of purchase so no tds is aplicable on such payment even the company is charging service tax
please help me to resolve this problem whether i deduct tds or not
The important part of the query is the data base marketing company providing invoice by mentioning tds rate applicable is 2%