TDS on Freight
This query is : Open
19 October 2010
Whether tax on freight ( Sea Freight ) is to be deducted eventhough the company providing sea transport facility quote PAN in its bill?
19 October 2010
Yes as the exemption is only for road transport
19 October 2010
There is a separate section 172 for deduction of tax on sea freight paid to a shipping company engaged in the shipping business for goods transported from India. No tax is required to be deducted from sea fright paid to such shipping lines or their agents in India in the shipping line provides a certificate to that effect from a tax authority under section 172.
19 October 2010
Whether the position is same if goods are imported to india ?
19 October 2010
In case of goods being imported the income of the shipping line does not accrue and arise in India at all as the source of income is the port from where the goods has been dispatched thus TDS provisions are not applicable at all. However some group argue that the TDS should be deducted on such payments, however this view does not seem to be correct
19 October 2010
Whether position remains the same even if the transporter is a indian company having its office in New Mumbai?
19 October 2010
Rajesh in that case are you making payment to a non resident? No!!. The meaning of goods carriage is provided in explanation to section 44AE of IT Act which means the motor trucks only. Ship does not fall within that category. Thus in that case the TDS would be required to be deducted.
19 October 2010
definition given in 44AE of IT Act belongs to only for computation of income on estimated basis in the case of taxpayers engaged in the business of plying, leasing or hiring trucks ? While my question related to vessel .
Definition on goods carriage is
goods carriage" means any motor vehicle constructed or adapted for use solely for the carriage of goods, or any motor vehicle not so constructed or adapted when used for the carriage of goods;
My sense is that vessel is also covered in the definiton of Goods Carriage.
Please reply.
Thanks
Definition on goods carriage is
goods carriage" means any motor vehicle constructed or adapted for use solely for the carriage of goods, or any motor vehicle not so constructed or adapted when used for the carriage of goods;
My sense is that vessel is also covered in the definiton of Goods Carriage.
Please reply.
Thanks
19 October 2010
Dear Motor Vehicle Act is applicable only to Road transport. There is a separate regulatory Act for ships. So ships are not motor Vehicles
19 October 2010
Where the transporter is from India, the only way to deduct TDS is sec 194C.
Now-------
Sec 195(C)(6) Exempt the deduction - in course of business of plying , hiring or leasing goods carriage,on furnishing of his PAN to the person paying the sum.
Explanation of Sec 194C (ii)
"goods carriage" shall have the meaning assigned to it in the explanation to sub-sec (7) of sec 44AE.
i.e. " the expression goods carriage and haevy goods vehicle shall have the meanings respectively assigned to them in section 2 of the Motor vehicle ACT 1988.
Coclusion
TDS will be applicable on sea transport.
Now-------
Sec 195(C)(6) Exempt the deduction - in course of business of plying , hiring or leasing goods carriage,on furnishing of his PAN to the person paying the sum.
Explanation of Sec 194C (ii)
"goods carriage" shall have the meaning assigned to it in the explanation to sub-sec (7) of sec 44AE.
i.e. " the expression goods carriage and haevy goods vehicle shall have the meanings respectively assigned to them in section 2 of the Motor vehicle ACT 1988.
Coclusion
TDS will be applicable on sea transport.
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