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Tds on interest on overdue purchase bills to creditor

CA.VARUN MISHRA (Practice) (280 Points)

30 April 2016

Dear Experts,

Please reply me whether Interest on Overdue purchase bills paid to our creditors is liable to TDS u/s 194A???

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5 Replies

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 30 April 2016

first of all

Purchase is out of scope of TDS, unless its booked under indirect expenses of P/L account

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if debit note is issued by the seller for interest ( if any), then accounting method of booking the debit note would ascertain the applicability of TDS applicable or not

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 30 April 2016

first of all

Purchase is out of scope of TDS, unless its booked under indirect expenses of P/L account

-------------

if debit note is issued by the seller for interest ( if any), then accounting method of booking the debit note would ascertain the applicability of TDS applicable or not

CA.VARUN MISHRA (Practice) (280 Points)
Replied 30 April 2016

We already deduct the TDS for our client yesterday in consult with our statutory auditor.I just want to assure myself whether it is right practice or not..

So many case laws & judgements available where it was decided that there is no applicability of TDS 194A.