Tds on payment by ad agency to the publisher ???

TDS 1865 views 1 replies

Hi friends,
i have query relating to applicability/Non applicability of TDS. Mentioned below is the brief facts of the case :

" My client (x pvt ltd) is an ADVERTISING AGENCY. x ltd books advertisement space from DNA -PUBLISHER PRINT MEDIA for the purpose of advertisement in news papers and magazines like HT, DNA etc.

 

x ltd enters into contract with client (CHATE CLASSES) for advertisement in aforesaid space booked by x ltd.

Illustration :
DNA charges say Rs.100000/- to x ltd for booking the advertisement space.

x ltd enters into contract with "CHATE CLASSES" and charges Rs.125000/-.

"CHATE CLASSES" deducts TDS @ 2% on Rs.125000 u/s. 194C

However when x ltd proposed to deduct TDS @ 2% on Rs.100000/- then DNA contends that TDS provisions are not attracted when an advertising agency makes payment to the publisher. They say that no advertising agency is deducting TDS while making payment to them.

I request all members to provide clarification on the same. Reference to circulars/case laws would be highly appreciated.

abhisheksinghandco @ gmail.com
9029644694

Replies (1)

As per normal provisions of section 194C, deduction of TDS by Chate Classes is absolutely right @ 2% and TDS should also be deducted on payment by X ltd to DNA because there is a contract between x ltd and DNA in which DNA provides ADVERTISEMENT WORK to x ltd.

The difinition of WORK as per section 194C also includes Advetisement.

So TDS should be deducted on Rs.100000 @ 2%.

 

NOTE- If there is any special circular or case law regarding the fact "TDS provisions are not attracted when an advertising agency makes payment to the publisher" , then that is not known to me. If you come to know, please share.

 

REGARDS

CA SUNNY AGGARWAL


CCI Pro

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