As per section 194C, any payments made to C & F Agent is subject to TDS.
However payments to the C&F Agent include following; 1. Reimbursement in respect of various custom formalities etc. inclg freight (Say Rs. 10,00,000/-) 2. his C&F charges (Say. Rs. 75000/-) 3. Total is Rs. 10,75,000
Case 1 - Now suppose he has raised single invoice for both 1 & 2 above, then on which amount TDS is required to be made?
Case 2 - Whether it will make any difference if C&F agent raises debit note for above 1 & his invoice for above 2.?
As per my opinion
Case 1- TDS is required to be made on whole i.e. on Rs. 10,75,000/- Case 2 – TDs is required to be made only on Rs. 75000/-
22 October 2008
thanks but more expert's opinion is required on this.
Guest
Guest
(Expert)
22 October 2008
the amount of TDS may be deducted on amount of Rs. 75000/- because the reimbursement exp. never considered the income of other party it is just the expesnes which other partly incurred on behfl of us so it is not required ot deduct the TDs on wholl amount of Rs. 1075000/-
U may deduct the TDS on wholle amount it depends on your opinion so the he has provided the service of Rs. 75000/- so the deducte the TDs on 75000/-
23 October 2008
I have got one more query in the current situation:
Here the point is that the C&F agent is just an agent and he incurs the expenditure on behalf of his principal.
Exp in the nature of freight is also subject to the prov of TDS.
So, whether it is the liability of C&F agent or of Principal for deducting TDS on freight amount?
Guest
Guest
(Querist)
23 October 2008
Yes shailesh you are right..
Two formality should be completed..
1. tax from the income of the person who has actually earned income shall be deducted... and not from the agent..
2. Tax shall be deducted by the person who is booking the exp. as the expense will get disallowed if he will not make tds.. so ultimately exp. will be booked by principal and not the agent..
He na interesting, Please experts reply.. an help us....
In my opinion, TDS would be deducted from the whole amt of Rs. 1075000/-. In corportes we follow such practice as TDS would be applicable u/s 194C for the CFA. If this is reimbursement or whatever by first point it would be treated as income for CFA and tds would be deducted and TDS certificate would be issued.
Further, if CFA is making the payment then they can deduct the TDS at the time of making the payment to the transporter as company is not directly dealing with the transporter.
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