04 November 2010
While making/credit to payments in respect of cargo handling services to a company TDS were deducted under Section 194C. The charges were paid towards the ocean freight, handling and other service charges for the containers. TDS was deducted and remitted @2%. Now the department asks for remittance of TDS under Section 194J. Is the contention of the Department tenable. Kindly explain in detail
04 November 2010
Clearing & Forwarding (C&F) services – TDS: Assessee applied Sec.194C in respect of payments made to C&F agents. Assessing Officer (AO) opined that such services are managerial in nature and Sec.194J is to be applied. Assessee was considered to be in default for short deduction. CIT (A) confirmed AO’s action. On appeal before the Hon’ble Delhi Bench of the Tribunal, it was held that C&F services were not professional or technical services as mentioned in Sec.194J and the same are pari materia to the services mentioned in Sec.194C. CBDT in its Circular No.720 dt.30.08.1995 provided that various provisions of Chapter XVII relating to TDS are mutually exclusive and any particular payment could be covered by a particular section to the exclusion of others. It was held that C&F services were covered only 194C and not 194J. Glaxo Smithklime Consumer Healthcare Ltd. vs. ITO (2007) 12 SOT 221(Del)
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