Is TDS should be deducted from ocean freight paid to shipping company..?
Thanks
ksh*tij
24 Replies
M.Sriram Shenoy
(CA Final)
(814 Points)
Replied 26 February 2008
Tax deduction at source from payment made to foreign shipping companies :
1. Representations have been received regarding the scope of sections 172, 194C and 195 of the Income-tax Act, 1961, in connection with tax deduction at source from payments made to the foreign shipping companies or their agents.
2. Section 172 deals with shipping business of non-residents. Section 172(1) provides the mode of the levy and recovery of tax in the case of any ship, belonging to or chartered by a non-resident, which carries passengers, livestock, mail or goods shipped at a port in India. An analysis of the provisions of section 172 would show that these provisions have to be applied to every journey a ship, belonging to or chartered by a non-resident, undertakes from any port in India. Section 172 is a self-contained code for the levy and recovery of the tax, ship-wise, and journeywise, and requires the filing of the return within a maximum time of thirty days from the date of departure of the ship.
3. The provisions of section 172 are to apply, notwithstanding anything contained in other provisions of the Act. Therefore, in such cases, the provisions of sections 194C and 195 relating to tax deduction at source are not applicable. The recovery of tax is to be regulated, for a voyage undertaken from any port in India by a ship under the provisions of section 172.
4. Section 194C deals with work contracts including carriage of goods and passengers by any mode of transport other than railways. This section applies to payments made by a person referred to in clauses (a) to (j) of sub-section (1) to any resident (termed as contractor). It is clear from the section that the area of operation of TDS is confined to payments made to any resident. On the other hand, section 172 operates in the area of computation of profits from shipping business of non-residents. Thus, there is no overlapping in the areas of operation of these sections.
5. There would, however, be cases where payments are made to shipping agents of non-resident ship-owners or charterers for carriage of passengers etc., shipped at a port in India. Since, the agent acts on behalf of the non-resident ship-owner or charterer, he steps into the shoes of the principal. Accordingly, provisions of section 172 shall apply and those of sections 194C and 195 will not apply.
Circular: No. 723, dated 19-9-1995.
1. Representations have been received regarding the scope of sections 172, 194C and 195 of the Income-tax Act, 1961, in connection with tax deduction at source from payments made to the foreign shipping companies or their agents.
2. Section 172 deals with shipping business of non-residents. Section 172(1) provides the mode of the levy and recovery of tax in the case of any ship, belonging to or chartered by a non-resident, which carries passengers, livestock, mail or goods shipped at a port in India. An analysis of the provisions of section 172 would show that these provisions have to be applied to every journey a ship, belonging to or chartered by a non-resident, undertakes from any port in India. Section 172 is a self-contained code for the levy and recovery of the tax, ship-wise, and journeywise, and requires the filing of the return within a maximum time of thirty days from the date of departure of the ship.
3. The provisions of section 172 are to apply, notwithstanding anything contained in other provisions of the Act. Therefore, in such cases, the provisions of sections 194C and 195 relating to tax deduction at source are not applicable. The recovery of tax is to be regulated, for a voyage undertaken from any port in India by a ship under the provisions of section 172.
4. Section 194C deals with work contracts including carriage of goods and passengers by any mode of transport other than railways. This section applies to payments made by a person referred to in clauses (a) to (j) of sub-section (1) to any resident (termed as contractor). It is clear from the section that the area of operation of TDS is confined to payments made to any resident. On the other hand, section 172 operates in the area of computation of profits from shipping business of non-residents. Thus, there is no overlapping in the areas of operation of these sections.
5. There would, however, be cases where payments are made to shipping agents of non-resident ship-owners or charterers for carriage of passengers etc., shipped at a port in India. Since, the agent acts on behalf of the non-resident ship-owner or charterer, he steps into the shoes of the principal. Accordingly, provisions of section 172 shall apply and those of sections 194C and 195 will not apply.
Circular: No. 723, dated 19-9-1995.
CA. Kirti S. Ganatra
(Service)
(1461 Points)
Replied 26 February 2008
At all no TDS need not deducted if payment is from Foreign to India. But for India to abroad we have to deduct TDS
MARUTI INDUSTRIES
(BUSINESS)
(34 Points)
Replied 04 August 2008
Deduction of TDS is applicable on payment made for ocean freight and other charges like THC, B/L Chg. and repo charges charges in bill received from shipping company for export goods.
Deepak Sharma
(Service & C.A. Final student)
(32 Points)
Replied 27 August 2008
| Originally posted by :ksh*tij | ||
| " |
Is TDS should be deducted from ocean freight paid to shipping company..? No There is no provision to deduct TDS on Ocean Freight , (including THC charges also because THC charges is a part of the Ocean freight ) Please Refer Section 172 of the IT Act. |
" |
Vijay
(Service)
(78 Points)
Replied 02 September 2008
If Wrongly i can not deduct TDS in 2007-2008 , then can i deduct TDS on same in 2008-2009. Please tell me process for the same & what is the E TDS requirements for the same ?
(Guest)
I need advice on following issues:
1.If I deposit 75crores in bank for 5years,quarterly compounding in my company (proprietorship) name,
when they will deduct TDS?
At the end of 5 years?
Or every financial year?
Or every quarter(since the interest is more than 10000rs/quarter)?
2.How much they will deduct?
Please guide me
Bhageshwar Mishra
(Service)
(24 Points)
Replied 03 October 2008
define job work under income tax act?
Juzer Sadikot
(CA - innovative solutions for Imports and Exports)
(1309 Points)
Replied 08 November 2008
| Originally posted by :Guest | ||
| " | If Wrongly i can not deduct TDS in 2007-2008 , then can i deduct TDS on same in 2008-2009. Please tell me process for the same & what is the E TDS requirements for the same ? |
" |
Dear Mr.Vijay,
Yes, you can deduct and pay TDS to government in subsequent year (with penal interest)
You just need to fill Form ITNS 281and pay with Banker (E-payment if applicable)
After payment of TDS, you need to file E-TDS Quarterly Return Revised/Correction statement for the quarter in which the payment or credit entry was made.
Regards
Juzer Sadikot
(CA - innovative solutions for Imports and Exports)
(1309 Points)
Replied 08 November 2008
| Originally posted by :Guest | ||
| " | I need advice on following issues: 1.If I deposit 75crores in bank for 5years,quarterly compounding in my company (proprietorship) name, when they will deduct TDS? At the end of 5 years? Or every financial year? Or every quarter(since the interest is more than 10000rs/quarter)? 2.How much they will deduct? Please guide me |
" |
Dear Mr. K. Prabhu.
TDS will be deducted on the date of Credit of interest (Quarterly) as the amount of concern interest is exceeding the threshhold limit of Rs. 10000/-
The rate of TDS will be 10% for Tax + 10% for Surcharge + 3% for Education & Higher Secondary Edcuation Cess suming upto 11.33%
Regards
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