tds for clearing & forwarding agents

Page no : 2

sribalaji Narayanan (partner) (22 Points)
Replied 06 August 2009

sir, One of my client running clearing & forwarding Partner ship concern rendering services to the ltd company. on behalf of the Importer, they cleared their imported machinery. They have billed the Reimbursement expeneses in one bill and service charges and related clearance charges in seperate bill.

The received amount(e.g) Rs.20000/- as an advance against the clearance charges, the Importer deducted the TDS amount on advance payment.
After the clearance our client has submitted the clearance bill for the amount of (e.g.)Rs.24350/- its inclued the re-imbursable expenses of (e.g)Rs.19000/- The rest of the amount of Rs.6000/- towards service charge and service tax and other related clearnace expenses.Now the question is ; As per TDS deduction section 194C read as

Section 194C

Deduction of tax at source - Payment to contractors

Payments to clearing and forwarding agents - Payments made to clearing and forwarding agents for carriage of goods are subjected to deduction of tax at source under section 194C, since unlike the travel agents, they are independent contractors. They would also be liable to deduct tax at source while making payments to a carrier of goods—Circular : No. 715, dated 8-8-1995.

Also the same has been clarified under circular no: 715 dated 8-8-1995 question no: 30 explained as

Question 30

Answer: Sections 194C and 194J refer to any sum paid. Obviously, reimbursements cannot be deducted out of the bill amount for the purpose of tax deduction at sourceAnswer
: Whether the deduction of tax at source under sections 194C and 194J has to be made out of the gross amount of the bill including reimbursements or excluding reimbursement for actual expenses ?

Please clarify, whether the TDS applicable on reimbursement also. If so pls advise how much % of TDS applicable for Reimbusement bill and service charges bills both bill?

will the reimbursement bill attract TDS? If so what is the rate? Pls clarify?

Regards,

Narayanan

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anil yadav (accounts incharge) (23 Points)
Replied 12 November 2009

on behalf of importer, we have paid customs duty, octroi, warehouse and other charges approx 32,30,000, now party is deducting tds on whole amount, and our agency charges is rs.40,000/- now party is deducting tds on total bill amount with comes to rs.55000/- approx. please let us know whether it is correct?

Santosh Gawalee (Artical Assistant) (21 Points)
Replied 22 May 2013

we have appointed an agent for clearing our vehicles at Octroi Naka, by payment of Octroi on our behalf. We will be reimbursing him the octroi amount basing upon the original octroi receipts and he charges commission charges on the octroi amount paid him. Can anybody clarify whether TDS is to be deducted on such service charges u/s94c or 94h.