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Tds at the time of migo / miro

Aryan (CA- Final) (101 Points)

23 August 2016

Hello Experts,

Please let me know when tax is required to be deducted ?? at the time of MIGO or MIRO in the books in SAP system?

Thanks in advance

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5 Replies

CA Srujann kumar Reddy (Asst Manager(Internal audit)) (1679 Points)
Replied 23 August 2016

MIRO is invoice posting and MIGO is stock posting...

at the time of invoice only you have to make tds...

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CA Saurabh Singh (Practising Chartered ) (974 Points)
Replied 23 August 2016

MIRO means movement in receipt out, whereas MIGO means movemet in recipt out.

I think whichver takes place earlier in regards to goods, TDS shall be deducted at the same.

As the TDS section states that TDS shall be deducted at the time of payment of credit whichever is earlier.

Aryan (CA- Final) (101 Points)
Replied 23 August 2016

Thank you gentlmen. I also think the deduction should be at the time of MIRO

But the Following paragraph of Sec 194 C clearly states deducting tax at the time of MIGO.

83[Payments to contractors.

84194C. (1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor85) for carrying out any work85 (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified person shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to—

(i) one per cent where the payment is being made or credit is being given to an individual or a Hindu undivided family;

(ii) two per cent where the payment is being made or credit is being given to a person other than an individual or a Hindu undivided family,

of such sum as income-tax on income comprised therein.

(2) Where any sum referred to in sub-section (1) is credited to any account, whether called "Suspense account" or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly.

Please explain.