Tds on stevedoring charges...!!!
This query is : Resolved
13 April 2012
X ltd purchases coal from Y ltd @ 5 rs per kg (inclusive of Labour , Stevedoring charges and Freight)
Amount of Labour , Stevedoring charges and Freight are SHOWN SEPERATELY in the bill.
Purchase order (PO) of X ltd does not specify seperatly the amounts of Labour , Stevedoring charges and Freight that is the rate specified on PO is not only of coal.
WHETHER TDS on STEVEDORING charges required to deduct...?
Amount of Labour , Stevedoring charges and Freight are SHOWN SEPERATELY in the bill.
Purchase order (PO) of X ltd does not specify seperatly the amounts of Labour , Stevedoring charges and Freight that is the rate specified on PO is not only of coal.
WHETHER TDS on STEVEDORING charges required to deduct...?
14 April 2012
TDS is to be deducted on the entire contract amount and not against any specific item
14 April 2012
and what if the party raises the DEBIT note for the said charges...?
27 July 2025
About **TDS on stevedoring charges** in your scenario:
---
### Facts Recap:
* X Ltd buys coal from Y Ltd at Rs. 5/kg (price inclusive of labour, stevedoring, freight).
* Labour, stevedoring, and freight charges are shown separately in the bill.
* Purchase order (PO) price is a lump sum and does not specify these charges separately.
---
### 1. **Is TDS required on stevedoring charges?**
* **Yes, if stevedoring charges are paid as part of a contract for services**, TDS may apply under **Section 194C (Contractor)** or **Section 194J (Technical or professional services)** depending on nature.
* **If stevedoring is part of the composite supply of coal** (purchase of goods), then **TDS is generally not deductible on purchase of goods** under the Income Tax Act, as TDS is on payments for services.
* Since the PO price is composite and does not specify separate amounts, the entire amount is treated as consideration for goods.
* Therefore, **no TDS required on stevedoring charges if it's part of the purchase price for goods.**
---
### 2. **What if the party raises a separate debit note for stevedoring charges?**
* If Y Ltd issues a **separate debit note** for stevedoring charges (which can be considered as a service supply), then:
* TDS **should be deducted on the debit note amount** if it qualifies as payment for services.
* Deduct under **Section 194C** (contractual services) at applicable rates (typically 1% for individual/HUF, 2% for others on payment to contractors).
* This debit note is treated as a separate transaction distinct from the sale of goods.
---
### Summary:
| Scenario | TDS Required? | Section |
| ------------------------------------------------- | ------------------- | ------- |
| Stevedoring part of composite goods price (PO) | No | N/A |
| Separate debit note raised for stevedoring charge | Yes (on debit note) | 194C |
---
**In short:**
* If no separate debit note or invoice for stevedoring charges → no TDS on stevedoring as part of goods purchase.
* If separate invoice/debit note issued for stevedoring → deduct TDS on that amount under 194C.
---
If you want, I can also help draft an official TDS clause or advisory note for your purchase order!
---
### Facts Recap:
* X Ltd buys coal from Y Ltd at Rs. 5/kg (price inclusive of labour, stevedoring, freight).
* Labour, stevedoring, and freight charges are shown separately in the bill.
* Purchase order (PO) price is a lump sum and does not specify these charges separately.
---
### 1. **Is TDS required on stevedoring charges?**
* **Yes, if stevedoring charges are paid as part of a contract for services**, TDS may apply under **Section 194C (Contractor)** or **Section 194J (Technical or professional services)** depending on nature.
* **If stevedoring is part of the composite supply of coal** (purchase of goods), then **TDS is generally not deductible on purchase of goods** under the Income Tax Act, as TDS is on payments for services.
* Since the PO price is composite and does not specify separate amounts, the entire amount is treated as consideration for goods.
* Therefore, **no TDS required on stevedoring charges if it's part of the purchase price for goods.**
---
### 2. **What if the party raises a separate debit note for stevedoring charges?**
* If Y Ltd issues a **separate debit note** for stevedoring charges (which can be considered as a service supply), then:
* TDS **should be deducted on the debit note amount** if it qualifies as payment for services.
* Deduct under **Section 194C** (contractual services) at applicable rates (typically 1% for individual/HUF, 2% for others on payment to contractors).
* This debit note is treated as a separate transaction distinct from the sale of goods.
---
### Summary:
| Scenario | TDS Required? | Section |
| ------------------------------------------------- | ------------------- | ------- |
| Stevedoring part of composite goods price (PO) | No | N/A |
| Separate debit note raised for stevedoring charge | Yes (on debit note) | 194C |
---
**In short:**
* If no separate debit note or invoice for stevedoring charges → no TDS on stevedoring as part of goods purchase.
* If separate invoice/debit note issued for stevedoring → deduct TDS on that amount under 194C.
---
If you want, I can also help draft an official TDS clause or advisory note for your purchase order!
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