TDS Liability on freight

This query is : Resolved

CA. Mahesh Sharma (Querist)
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30 November 2007
Dear Sir

Who is liabale for TDS on freight in following cases.

(1) A trader who is from Indore and dealing in grains and purchases grain from a station i.e. Kota and directaly sold Grains to Pune and bilty of freight is in the name of Indore trader. partial payment of bilty was made by agent of trader at kota and partial was made by trader of pune and recovered from trader of Indore.

CA. O.P. Agarwalla

CA. O.P. Agarwalla (Expert)
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01 December 2007 This is a interesting situation for interpretation. Here the works contract is made between the indore based assessee and the transporter, further as the bilty (raised in terms of agreement) is in the name of Indore Traders. Hence, the person responsible for making the payment is Indore based Trader. There is no contract of work between Kota and Pune based traders with transporter or indore based trader. Hence, in my opinion (subject to rectification by seniors) Indore based Dealer is liable for deduction of taxes u/s. 194C. However he can instruct Pune and Kota based traders to deduct TDS on his behalf.