TDS on debit note issued by purchase party

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Jay Kothari (Querist)
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12 March 2011 dear sir ,

One of my client sales goods to a person.That person told my client to give him commission on invoice.For this that person has issued debit note . Is my client required to deduct TDS on commission amount paid by him.

Thanks and regards
Jay

K.Srini

K.Srini (Expert)
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14 March 2011 From your question it appears that the purcaser and the persoon who has got the commission is one and the same, which cannot be. There should be a principal and agency relationship exists for one to get a commission payment. Were any amount is being paid back to the purchaser against the purchases made by him then it can be said to be a discount and not a commission. Your client shall give a credit note to the purchaser stating the amount clearly as discount to avoid any possible disputes latter on