shailendra (C.A. FINAL) (189 Points)
30 December 2009I have seen a practical case in my recent Audit.
I am explaining it here, i need your comments......
Remember that w.e.f 1.10.2009 TDS on transporter of goods is NIL.
what i have seen is transporter has rendered its service on 29.09.2009 and bill date is 29.09.2009.
But the company has booked its invoice on 2.10.2009.
Will the booking on 02.10.2009 is liable to TDS.
According to me company is liable to deduct TDS since service has been rendered before 01.10.2009.
What are your comments?
Shudhanshu Agrawal
(Business)
(2570 Points)
Replied 30 December 2009
According to me you have to see the policy and procedure of the company in booking an entry. They must be following a particular procedure for booking entries. If other entries are booked on invoice date then this entry should also be booked on invoice date. So please check the policy and procedure for booking entries
Bimal Thacker
(Proprietor)
(762 Points)
Replied 30 December 2009
Dear Friend
First of all note that w.e.f 1.10.2009 TDS on transporter of goods is not NIL but on fulfillment of certain condition Tax is not require to be deducted.
and secondly if the payment has not been made before 1.10.2009 and all the condition for non deduction has fullfil then on booking of invoice on 2.10.2009 no tax is required to be deducted
shailendra
(C.A. FINAL)
(189 Points)
Replied 30 December 2009
Dear Shudhanshu,
The Policy of booking the invoices are in the very big companies and not in the middle size companies. What they basically do is whenever they will receive the invoice then will book it on the same date.
What i think is Policy has no relevance in this question.
Because there are some transporters which give their all their bills once in a year in march. Then what will you do in that case and back dated entry is not possible in ERP system.
shailendra
(C.A. FINAL)
(189 Points)
Replied 30 December 2009
Dear Bimal sir,
In this question there is a difference of 2 to 3 days only. If i take it as a financial year then what:-
F.Y. 07-08 TDS applicable
F.Y. 08-09 TDS not applicable
If transporter has given you bill in F.Y 08-09 to avoid deducting TDS then what will you do??
Shudhanshu Agrawal
(Business)
(2570 Points)
Replied 30 December 2009
Let me tell you friend that back date entries are not allowed. Moreover as you are mentioning that it books entiries on the date of receiving the bill then....and if u book the entry on 2-10-09 then how can u applicable the section 194C which was till 30-09-09. So according to me bill date here doesnt have any sense as in the section deduction is considered on date of booking an entry or amount paid whichever is earlier.
Harish Bhootra
(Service)
(76 Points)
Replied 30 December 2009
Tds should not be deducted bez liablity of TDS arises either on payment or on crediting the party whichever is earlier. In our case company had booked the invoice on 02.10.2009.
shailendra
(C.A. FINAL)
(189 Points)
Replied 30 December 2009
What if think is:-
LEVIED,
DEDUCTION,
AND PAYMENT are three different concepts.
I agree that liability to deduct TDS arises only when bill is booked or advance payment is made. But it refers to only DEDUCTION
But TDS is levied only when service is rendered, so TDS should be deducted.
Shudhanshu Agrawal
(Business)
(2570 Points)
Replied 30 December 2009
I dont think in any section it is mentioned that TDS deduction is related with rendering services. Please correct me if im wrong.
ca tarun sharma
(SERVICE)
(277 Points)
Replied 30 December 2009
it is d bill date or bill period which is relevant to consider any exp to a particular period then how it can be ignored & it should be entered in books on particular date or period if co avoid such policy it can not set aside d provision of law . since exp is incurred before 01.10.09 it shall attract tds
CMA K SIVA KUMAR
(Jr. Executive (Accounts))
(79 Points)
Replied 30 December 2009
hello sir w.e.f. 01-10-2009 tds on transporters is not it have been changed to w.e.f.01-04-2010 and according to my knowledge tds will be deduct sep rates.
Shudhanshu Agrawal
(Business)
(2570 Points)
Replied 30 December 2009
Mr. Tarun,
We are discussing on a particular problem and i have mentioned in my reply here in this case if policy of the company is followed and Mr. Shailender has confirmed that they have booked it according to the policy.
shailendra
(C.A. FINAL)
(189 Points)
Replied 30 December 2009
Dear shiv,
please check out the amendment made in finance act 2009. TDS rates have been changed w.e.f. 1-10-2009
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