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TDS Related Quary

CHETAN (CA STUDENT) (154 Points)

04 December 2008

Hi,

my name is chetan. i am working in a C.A Firms.Currently i am on audit of a garment export house.There is bill found submitted by a registered firm on reply of service rendered by company.The service was consultancy on refund of duty drawback. on bill they charged 0.75% amount of drawback refund+service tax(12.36).Nothing else charged on bill.Accounts department of company deduct TDS Under Sec194C by 2.266%.But i have confussion on same.In my opinion TDS Should be deduted under sec 194H(Commision & Other) by 11.33%(Including surcharge and cess).Because the said firm are not professional.

Pls suggest me. pls give the difference between Contractor,Professional and commission services also section applicable there on.

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9 Replies

ANAND GUPTA (Practicing Chartered Accountant) (20 Points)
Replied 04 December 2008

As per details submitted by you TDS would be deductible @ 11.33% u/s 194H(Commission) and not u/s 194C(contractors) @ 2.266% which has been applied.What category of consultants are they has not been mentioned therefore TDs u/s 194J is not applicable. TDS rates for services are as follows: Professional services - 10%(+surcharge and cess as per assessee status)-11.33% max. Commission-same as above Contractor- 2% (+surcharge and cess as per assessee status)-2.266% max

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CHETAN (CA STUDENT) (154 Points)
Replied 05 December 2008

Originally posted by :Guest
"	As per details submitted by you TDS would be deductible @ 11.33% u/s 194H(Commission) and not u/s 194C(contractors) @ 2.266% which has been applied.What category of consultants are they has not been mentioned therefore TDs u/s 194J is not applicable. TDS rates for services are as follows: Professional services - 10%(+surcharge and cess as per assessee status)-11.33% max. Commission-same as above Contractor- 2% (+surcharge and cess as per assessee status)-2.266% max	"

Pls give me differece beetween contractor,professional and Broker also applicable sectiop for deduction of TDS.there on

Shudhanshu Agrawal (Business) (2570 Points)
Replied 05 December 2008

Dear

TDS can be deducted under Section 194C i.e. Contract if they are having any contract.........i think u are assuming it as commission coz he has charged percentage on drawback.......but it is not necessary that we will take it as commission.....in a contract also u can charge amount on total amount of duty drawback........but onething which is still unclear abt the firm.......if possible take details of firm and give to us as well

By the way its a nice query but pls do check the firm whether its a consultancy firm what kind of it is.......

Shudhanshu Agrawal (Business) (2570 Points)
Replied 05 December 2008

Section 194C is for contract

Section 194J for professional and technical services

Section 194H is for commission

CHETAN (CA STUDENT) (154 Points)
Replied 06 December 2008

Originally posted by :Shudhanshu
"	Dear TDS can be deducted under Section 194C i.e. Contract if they are having any contract.........i think u are assuming it as commission coz he has charged percentage on drawback.......but it is not necessary that we will take it as commission.....in a contract also u can charge amount on total amount of duty drawback........but onething which is still unclear abt the firm.......if possible take details of firm and give to us as well By the way its a nice query but pls do check the firm whether its a consultancy firm what kind of it is.......	"

Dear,

The firm name is Agility service pvt ltd.It is an mumbai bassed firm.The is giving service on work related to custom department. This firm is registered under servict tax.

Pls give me some effective idea on it. Also pls give me any case relating to this setuation.Here managment of this company asking me for proof,who support my suggestion.how can i prove that,which section is applicable

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Yogesh Kumar Gupta (CA Final) (44 Points)
Replied 06 December 2008

Hi chetan,

TDS can be Deducted u/s 194J @ 11.33% instead of 194C 2.266%

thanks!

Omkar (Student) (255 Points)
Replied 07 December 2008

Chetan,

First you see that what is the business of the service provider.Normally,the duty drawback has been released by the C&F agent only.

So,if the service provier is a C&F agent then TDS willl be as per section 194C only.

If the service provider is consultant then TDS will be as per 194J.

CHETAN (CA STUDENT) (154 Points)
Replied 08 December 2008

Originally posted by :Omkar
"	Chetan, First you see that what is the business of the service provider.Normally,the duty drawback has been released by the C&F agent only. So,if the service provier is a C&F agent then TDS willl be as per section 194C only. If the service provider is consultant then TDS will be as per 194J.	"

Hi,

they are not C& F Agent. also they are not professional.Can i deduct TDS on a person persons another than professional as per sec 194J.

Pls reply with strong region.

Omkar (Student) (255 Points)
Replied 08 December 2008

You mean to say that the service provider is not professional consultant.

Then you can deduct TDS u/s 194C.

Because section 194J will be applicable if "Any person,who is resposible for paying to a resident any sum by way of fees for professional services,or fees for technical services or royalty shall deduct tax at sourse."