01 May 2010
Sir, suppose A Ltd. gives B Ltd. a L/C(Letter of Credit) or Bill of Exchange worth Rs 10,00,000 against purchase of goods. Now B Ltd. gets it discounted from bank for which bank deducts discounting charges of Rs 70,000. Now B Ltd. raises a Debit Note of Rs 70,000 to A Ltd. Now is A Ltd. liable to deduct TDS on reimbursement of Rs 70,000 dis. ch. to B Ltd.????
Entry in A Ltd.'s books: Material A/c / Dis. Charges 70,000 To B Ltd. 70,000 (Being L/C dis ch. reimbursed)
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