08 September 2023
TDS on courier charges is required to be deducted U/s 194C at a rate of 1% for payments to residents . The TDS should be calculated based on the invoice value, but the treatment of Goods and Services Tax (GST) in the invoice affects the calculation.
If the GST value is mentioned separately in the invoice, TDS should be deducted on the invoice value excluding the GST amount. This is in accordance with Circular No. 23/2017.
However, if the GST value is not mentioned separately in the invoice, TDS should be deducted on the entire invoice value. This guidance is also provided in Circular No. 23/2017.
In summary, whether GST is separately mentioned in the invoice or not determines how TDS is calculated on courier charges under Section 194C of the Income Tax Act, 1961
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