Applicability of TDS on Ocean Freight

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No TDS is required on ocean freight paid to foreign shipping companies as Section 172 applies. However, if paid to resident shipping companies or freight forwarders, TDS may apply under Section 194C. Payments to Indian agents of foreign shipping lines may also be exempt in certain cases.

Nirpendra Singh

Nirpendra Singh (Querist)
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20 December 2010 Whether TDS is required to be deducted on the payment of Ocean Freight on Export?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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20 December 2010 If payment is made to foreign shipping companies, provisions of section 172 shall apply and those of sections 194C and 195 will not apply.
Whereas Carriage of Goods by sea is subject to TDS when paying to resident shipping companies and freight forwarders u/s 194C.

CA Manikandan.A.V

CA Manikandan.A.V (Expert)
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20 December 2010 I agree with Chakrapani Sir. To add to that if Ocean Freight paid to an an Indian Company which is an Agent of Foreign Shipping Company, TDS is not applicable.

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