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Discussion > Income Tax > TDS > TDS on Freight

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M.Govindaraja
Charteres Accountants
[ Scorecard : 24]

Posted On 21 August 2008 at 18:42

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A logistic company (D Indian Company) has entered into contract with another logistic company out side India. ( K Korea Company). For the customers both will do the services and share the profit 50:50

Now the K Korean Company has obtained a work to send the goods to India and Indian company has cleared the goods and delivered to the Concern party. The concern party has paid the freight to the D Indian Company. The D Indian Company has to pay back to K Korean Company. Actually K Korean Company has paid the freight in Korea. The Commission on the freight is shared @ 50:50. Hence after deduction of the share the D Indian Company will remit to K Korean Company

The issue is whether TDS has to be deducted or not on the freight payment? if not under which provision.

As per DTAA articles 8 &9 when the freight payment to Airlines or the transporter only exempted.

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