TDS on Port Charges
This query is : Open
03 May 2011
Dear Members,
Need clarification wrt the following issue: -
Our Company had imported a lift from Dubai. Our Agent have charges us various charges under following heads: -
1).Port CFS Charges
2).Container transfer charges
3).Empty container unloading charges
4).Calcutta port tax
5).Container handling cargo examination charges
6).Forwarding agency charges
7).D O fees
8).Carrier DO fees.
All the bills have been raised by some companies. Some bills have been raised in the name of agent and in some bills our company name has been mentioned along with Agent name. Agent has made payment on behalf of us.Then should we deduct TDS on above or not.
Further agent has given us a copy of circular no - 723 which I think not applicable for the charges mentioned above.
Need your opinion on above.
Thanking you
Need clarification wrt the following issue: -
Our Company had imported a lift from Dubai. Our Agent have charges us various charges under following heads: -
1).Port CFS Charges
2).Container transfer charges
3).Empty container unloading charges
4).Calcutta port tax
5).Container handling cargo examination charges
6).Forwarding agency charges
7).D O fees
8).Carrier DO fees.
All the bills have been raised by some companies. Some bills have been raised in the name of agent and in some bills our company name has been mentioned along with Agent name. Agent has made payment on behalf of us.Then should we deduct TDS on above or not.
Further agent has given us a copy of circular no - 723 which I think not applicable for the charges mentioned above.
Need your opinion on above.
Thanking you
03 May 2011
In ITO vs. Dr. Willamer Schwable India (P) Ltd. [3 SOT 71 (Del.)], the Tribunal has held that reimbursement of actual expenses where no profit element is involved, is not liable for the TDS.
The Apex Court in case of Birla Cement Works vs. CBDT [248 ITR 216] has held that the word ‘work’ in section 194C has to be understood in a limited sense and would extend only to the service contracts specifically included in the section by way of Explanation III. The aforesaid decision, has been followed by the Bombay High Court in East India Hotels Ltd. vs. CBDT [179 Taxman 17].
Recently, following the aforesaid decisions the Mumbai Tribunal in ACIT vs. P.P. Overseas vide ITA No. 733/Mum/2010 dated February 18, 2011 has held that:
"The contract between the assessee and
C & F Agent is a service contract which has not been specifically included in Explanation III below section 194C. In this view of the matter, the provisions of section 194C are not applicable to the payments to the C & F agents. If that is so, there was no obligation on the part of the assessee to deduct tax from the payments made to C & F agents".
CA MANOJ GUPTA
JODHPUR
09828510543
The Apex Court in case of Birla Cement Works vs. CBDT [248 ITR 216] has held that the word ‘work’ in section 194C has to be understood in a limited sense and would extend only to the service contracts specifically included in the section by way of Explanation III. The aforesaid decision, has been followed by the Bombay High Court in East India Hotels Ltd. vs. CBDT [179 Taxman 17].
Recently, following the aforesaid decisions the Mumbai Tribunal in ACIT vs. P.P. Overseas vide ITA No. 733/Mum/2010 dated February 18, 2011 has held that:
"The contract between the assessee and
C & F Agent is a service contract which has not been specifically included in Explanation III below section 194C. In this view of the matter, the provisions of section 194C are not applicable to the payments to the C & F agents. If that is so, there was no obligation on the part of the assessee to deduct tax from the payments made to C & F agents".
CA MANOJ GUPTA
JODHPUR
09828510543
04 May 2011
Dear Manoj Ji,
Thanks for the reply.
Also, if you can provide me the case law of P P Overseas then it would of great help.
Thanking you.
Thanks for the reply.
Also, if you can provide me the case law of P P Overseas then it would of great help.
Thanking you.
06 May 2011
Dear Manoj Ji,
Plz look into the same.
Thanking you
Plz look into the same.
Thanking you
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