Tds

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NARESH KUMAR SHARMA (Querist)
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25 December 2012 Q. We sold some goods to "A". There was some defect found in goods and then "A" got repaired that defacts from another Party "B" for which he paid Rs. 80000/-. "A" then debited such amount (80000/-) to our account as a deduction from payment agst. repairing done by him and submit bill of "B" for repairing charges which was made in our Firm Name.

What will be treatement for this in our books, will it be treated as rebate and discount or be treated as repairing charges.

Further whether we are liable to deduct TDS on such amount. If yes, then in whose account "A" Or "B".

kindly advise

thanks

CA Pradeep Patil

CA Pradeep Patil (Expert)
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26 December 2012 Since repairs are to traded goods,the Repair Charges will be treated as addition to Cost of Goods Sold,presuming that "A" has not accepted the Goods sold to him at the time of delivery.Since the Repair Bill is raised on you by "B" and payment has been made by you (Nature of Payment- Otherwise than by Cheque) liability of deducting TDS is on you. TDS Certificate to be issued to "B".