No TDS deduction on payment of Shipping Line Charges in case of Import

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TDS is not deducted on import shipping line charges because Section 172 of the Income Tax Act is a self contained code for taxation of non resident shipping businesses. Hence, Sections 194C and 195 relating to TDS are not applicable on such payments.

Rachana Gokhale

Rachana Gokhale (Querist)

02 June 2023 Dear Sir/ Madam,

May I please know why TDS in NOT deducted on Payment of Shipping Line Charges in case of Import ?

Thank you,
Rachana

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

03 June 2023 Section 172 deals with shipping business of non-residents. Section 172(1) provides the mode of the levy and recovery of tax in the case of any ship, belonging to or chartered by a nonresident, which carries passengers, livestock, mail or goods shipped at a port in India. An analysis of the provisions of section 172 would show that these provisions have to be applied to every journey a ship, belonging to or chartered by a non-resident, undertakes from any port in India. Section 172 is a self-contained code for the levy and recovery of the tax, shipwise, and journeywise, and requires the filing of the return within a maximum time of thirty days from the date of departure of the ship.
The provisions of section 172 are to apply, notwithstanding anything contained in other ‘ provisions of the Act. Therefore, in such cases, the provisions of sections 194C and 195 relating to tax deduction at source are not applicable. The recovery of tax is to be regulated, for a voyage undertaken from any port in India by a ship under the provisions of section 172.

Rachana Gokhale

Rachana Gokhale (Querist)

12 June 2023 Dear Sir,
Thank You for explanation.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

12 June 2023 You are welcome..
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