T d s us 94c

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This discussion explores whether Tax Deducted at Source (TDS) under Section 94C applies to payments made in convertible foreign exchange for sea freight through an EEFC account with India Bank. The query centres on whether Indian freight forwarders, acting as intermediaries between exporters and foreign shipping lines, qualify for the TDS exemption typically granted to foreign shipping companies or their agents under CBDT circular 723 of 1995. The consensus leans towards the exemption being applicable as these forwarders are considered agents or middlemen, not direct agents of the foreign shipping line in the context of Section 172.

MAKARAND DAMLE

MAKARAND DAMLE (Querist)
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31 July 2021 In Terms of notification FEMA 10 (R)/2015-RB of January 21,2016 payment is made through EEFC account maintained with India Bank in convertible foreign exchange towards sea freight

My question is whether TDS us 94C is applicable to above payments ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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31 July 2021 As per CBDT circular 723 of 1995, foreign shipping companies or their agents are exempted from TDS under section 194C – payment to contractors .

MAKARAND DAMLE

MAKARAND DAMLE (Querist)
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02 August 2021 The parties to whom freight payment is made are Indian Freight Forwarders

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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02 August 2021 They will be considered as shipping agents TDS not applicable.

MAKARAND DAMLE

MAKARAND DAMLE (Querist)
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02 August 2021 THEY ARE NOT DIRECT AGENTS OF FOREIGN SHIPPING LINE IN TERMS OF SECTION 172.
THEY ARE MIDDLEMEN BETWEEN EXPORTER AND SHIPPING LINE REPRESENTING FOREIGN SHIP OWNERS

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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02 August 2021 Middlemen and the agents are one and the same. They are directly dealing with ship owners.
Is it reimbursement of freight bill.

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