Applicability of Section 194Q
This query is : Resolved
03 February 2024
Suppose, during F.Y. 2023-24
Mr. A(Turnover>Rs. 10 Crore in F.Y. 2022-23) purchased goods from Mr. B(assuming GST exempt goods) on following dates:-
02.06.2023 Rs. 12 Lacs
21.10.2023 Rs. 20 Lacs
06.11.2023 Rs. ( 9 Lacs) (Purchase Returns)
28.11.2023 Rs. 25 Lacs
Would Section 194Q apply in the above case?
In my opinion, it will not apply as Rs. 50 lacs amount not crossed for the aggregate value of goods. Please guide
Mr. A(Turnover>Rs. 10 Crore in F.Y. 2022-23) purchased goods from Mr. B(assuming GST exempt goods) on following dates:-
02.06.2023 Rs. 12 Lacs
21.10.2023 Rs. 20 Lacs
06.11.2023 Rs. ( 9 Lacs) (Purchase Returns)
28.11.2023 Rs. 25 Lacs
Would Section 194Q apply in the above case?
In my opinion, it will not apply as Rs. 50 lacs amount not crossed for the aggregate value of goods. Please guide
04 February 2024
Your total purchase exceed 50 lacs without considering return, hence 194q TDS applicable.
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04 February 2024
Circular no. 13 of 2021 dated 30/06/2021 of CBDT points out this issue as follows:-
4.3.3 Further, with respect to purchase return it is clarified that the tax is required to be
deducted at the time of payment or credit, whichever is earlier. Thus, before purchase return
happens, the tax must have already been deducted under section 194Q of the Act on that
purchase. If that is the case and against this purchase return the money is refunded by the
seller, then this tax deducted may be adjusted against the next purchase against the same
seller. No adjustment is required if the purchase return is replaced by the goods by the seller
as in that case the purchase on which tax was deducted under section 194Q of the Act has
been completed with goods replaced.
After considering this, please tell the amount of TDS to be deducted in the example quoted by me
4.3.3 Further, with respect to purchase return it is clarified that the tax is required to be
deducted at the time of payment or credit, whichever is earlier. Thus, before purchase return
happens, the tax must have already been deducted under section 194Q of the Act on that
purchase. If that is the case and against this purchase return the money is refunded by the
seller, then this tax deducted may be adjusted against the next purchase against the same
seller. No adjustment is required if the purchase return is replaced by the goods by the seller
as in that case the purchase on which tax was deducted under section 194Q of the Act has
been completed with goods replaced.
After considering this, please tell the amount of TDS to be deducted in the example quoted by me
04 February 2024
In such a case of amount adjusted against return 194q not applicable.
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