TDS on Reimbursement

Satish Makam (Asst. Manager - Accounts)   (294 Points)

22 September 2010  

The seller of the goods pays the frieght amount first. At later the purchaser pays back the frieght amount to the seller.

here the seller passes the entry ----

                   Frieght      Dr     30000

                           To   Bank              30000

when he receives the frieght amount from the purchaser, then the following entry is passed

                  bank      dr      30000

                       To frieght                30000

it is abserved that there is no expense and no income. the account is nullified.

now my question is, the seller is requied to deduct tds.

if not deducted , then what is the liability