22 March 2024
Billdesk issues invoice for their charges for GST Payment through Credit Card. Whether we have to deduct TDS? If yes, then under which section?
11 July 2024
In the context of payments made to Billdesk for their services related to GST payment through credit card, TDS (Tax Deducted at Source) is not applicable. TDS is generally applicable in specific scenarios where payments are made to residents and certain conditions are met under the Income Tax Act, 1961.
Here are the key points regarding TDS applicability in this case:
1. **Nature of Payment**: The payment made to Billdesk is for services rendered, specifically related to facilitating GST payments through credit cards. This does not fall under the categories where TDS is required to be deducted.
2. **Section 194C**: Section 194C of the Income Tax Act pertains to TDS on payments to contractors or sub-contractors for carrying out any work (including supply of labor for carrying out any work). This section is typically relevant for payments to contractors for construction, repairs, advertising, etc. Since Billdesk is providing a service related to payment processing and not a work contract, Section 194C does not apply.
3. **Section 194J**: Section 194J covers TDS on fees for professional or technical services. However, services provided by Billdesk for GST payment processing do not fall under professional or technical services as defined under this section.
4. **GST on Services**: While TDS may not be applicable, it's important to ensure that GST (Goods and Services Tax) is correctly accounted for and paid on the charges billed by Billdesk. GST regulations require businesses to pay GST on services received, unless they fall under exempt categories or are provided by small suppliers.
**Conclusion**: In summary, for the charges billed by Billdesk for GST payment through credit card services, TDS is not applicable under any specific section of the Income Tax Act. However, GST must be appropriately accounted for and paid as per GST regulations. Always ensure compliance with both GST and Income Tax provisions by consulting with a tax professional or referring to the latest guidelines issued by the authorities.
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