Mr.A purchase goods from Mr.B.Mr.B makes transport payment to transporter.WHAT ABOUT TDS LIABILITY on Mr.A who reimburses the amount to Mr.B. Mr.A will claim this frieght as an expenditure in his P&L A/c.(will Frieght be disallowed on a/c of non deduction of TDS) Will it make any difference if the frieght amount is inclusive in the bill.
23 January 2008
If B recovers exact amount of transport cost from A, enclosing the copy of the bill raised by the transporter, and if B has paid the same amount to the transporter deducting tax at source, no liability to A to deduct tax on the transport charges.
If the freight amount is inclusive of Bill, then the goods are sold by B at C & F basis to A and the question of TDS does not arise.
23 January 2008
IF IT IS A COST INSURANCE FREIGHT CONTRACT(CIF) SALE, TDS IS NO ISSUE. OTHERWISE THE PAYER OF ACTUAL FREIGHT TO TRANSPORTER HAS TO DEDUCT TDS. R.V.RAO