TDS -194 C
This query is : Resolved
13 March 2009
Sir,
Our Company is a Sole Proprietor firm. We are rendering services for Bunker Fuel oil Barge owners at Chennai and Ennore Ports. Our work relates to various services rendered in connection with supply of Bunker fuel oils through Tank Barges to various ships coming to Chennai/ Ennore Ports. We have been charging our service charges as Agency Fees. Our Principals were making TDS under Sec 194C of IT Act.Though we are rendering the same service oriented work, since last month we are being charged at 11.33% which is applicable for professional work under section 194J. In this connection we found from your Expert reply dated 23rd Dec,2007 & 25th Dec2007 that even Agency Fees or any work done in shipping / handling attracts only Sec 194 C & hence TDS is only 2.265%. We request you to kindly give us your Expert advice in this matter.
Thanking you for your advice and with best Regards
Jude Vallabadas
Our Company is a Sole Proprietor firm. We are rendering services for Bunker Fuel oil Barge owners at Chennai and Ennore Ports. Our work relates to various services rendered in connection with supply of Bunker fuel oils through Tank Barges to various ships coming to Chennai/ Ennore Ports. We have been charging our service charges as Agency Fees. Our Principals were making TDS under Sec 194C of IT Act.Though we are rendering the same service oriented work, since last month we are being charged at 11.33% which is applicable for professional work under section 194J. In this connection we found from your Expert reply dated 23rd Dec,2007 & 25th Dec2007 that even Agency Fees or any work done in shipping / handling attracts only Sec 194 C & hence TDS is only 2.265%. We request you to kindly give us your Expert advice in this matter.
Thanking you for your advice and with best Regards
Jude Vallabadas
13 March 2009
What type of services you are providing?
13 March 2009
Following works are attented to by us
A)
1) Co-ordination of Bunker fuel oil supply with Indian Oil Corporation Ltd who are sellers of oil with Chennai & Ennore ports and with concerned Agents, Ships & Chief Engineers.
2) Obtaining permissions for movement of barges within Chennai & Ennore Ports attending to supervision of loading of bunker fuel oil from IOC, shore tank facility and terminal and respective tanker barge at Chennai / Ennore ports.
3) Liasioning with IOC Oil terminal on various matters relating to bunker supplies at Chennai & Ennore Ports.
4) Attending to Crew matters.
5) Attending to maintenance repair of tank barges by coordinating the same with barge owners and arranging for work shop and materials.
6) Preparing supply invoices on behalf of owners to IOCL and receiving settlement of the same for owners account.
7) Attending to statutory certificates work of each barge with concerned Govt. Dept.
8) Arranging for survey of respective barges with Marine Surveyors.
9) Attending to correspondence and replies with various Agency as and when required for and on behalf of owners under authority from them in their own name and style.
B) Above are the general pattern work and apart from which we represent owners at every forum.
C) We do not have any written agreement towards above work nor do we have any agency appointment.
D) We are not rendering any professional service but our work can be treated in general as Agents work for which our monthly fees was raised as Agency Fees.
We await yor kind reply.
Jude Vallabadas
A)
1) Co-ordination of Bunker fuel oil supply with Indian Oil Corporation Ltd who are sellers of oil with Chennai & Ennore ports and with concerned Agents, Ships & Chief Engineers.
2) Obtaining permissions for movement of barges within Chennai & Ennore Ports attending to supervision of loading of bunker fuel oil from IOC, shore tank facility and terminal and respective tanker barge at Chennai / Ennore ports.
3) Liasioning with IOC Oil terminal on various matters relating to bunker supplies at Chennai & Ennore Ports.
4) Attending to Crew matters.
5) Attending to maintenance repair of tank barges by coordinating the same with barge owners and arranging for work shop and materials.
6) Preparing supply invoices on behalf of owners to IOCL and receiving settlement of the same for owners account.
7) Attending to statutory certificates work of each barge with concerned Govt. Dept.
8) Arranging for survey of respective barges with Marine Surveyors.
9) Attending to correspondence and replies with various Agency as and when required for and on behalf of owners under authority from them in their own name and style.
B) Above are the general pattern work and apart from which we represent owners at every forum.
C) We do not have any written agreement towards above work nor do we have any agency appointment.
D) We are not rendering any professional service but our work can be treated in general as Agents work for which our monthly fees was raised as Agency Fees.
We await yor kind reply.
Jude Vallabadas
16 March 2009
Sir,
Awaiting your kind reply
Awaiting your kind reply
25 March 2009
Sir,
Kindly confirm TDS for our above service rendering work will be under IT Sec 194 C or 194 J. We are awaiting your kind reply.
Kind Regards
Kindly confirm TDS for our above service rendering work will be under IT Sec 194 C or 194 J. We are awaiting your kind reply.
Kind Regards
27 July 2025
Thank you for the detailed explanation, Mr. Vallabadas. Based on the nature of your activities and the legal position, here's a reasoned response:
---
## ✅ **Conclusion:**
**TDS should be deducted under Section 194C** (contractual payments) and **not under Section 194J** (professional services).
---
## 🔍 **Rationale:**
### Section 194C – *Applies to Works/Service Contracts*
This section applies when payment is made for:
* Carrying out **any work**
* Including **supply of labor** or services under a contract
* Covers **non-professional, routine commercial or operational activities**
You are:
* Coordinating logistics, permissions, correspondence, crew matters, and invoicing
* Acting as an **agent** or **operations facilitator**
* **Not** rendering any technical or professional expertise that requires qualifications (like legal, accounting, medical, architectural, etc.)
➡️ This falls under the scope of **"work"** under 194C as a **contractual operational service**, especially in the shipping/logistics domain.
---
### Section 194J – *Applies to Professional or Technical Services*
This applies when the service is:
* **Professional** in nature (legal, medical, engineering, accountancy, etc.)
* **Technical consultancy**
* **Managerial or consultancy** (under FTS, especially for non-residents or when substantial intellectual input is involved)
Your services **do not require any professional qualification or certification**, and are not "consultancy" in the 194J sense — they are **executional/coordination-based operational services.**
---
### 🔖 Past CBDT & Tribunal Clarifications:
* **CBDT Circular No. 715 dated 8-8-1995** clarifies that **routine agency or liaison services** are covered under **194C**, not 194J.
* Various tribunals have ruled that unless the services are rendered by professionals (engineers, CAs, doctors, etc.), 194J will not apply.
* **Shipping agency services**, port handling, logistics coordination, etc. have consistently been held to fall under **Section 194C**.
---
## 💡 Suggested Response to Principal:
You can request your principal to reconsider the TDS section by highlighting:
1. **Nature of services** is not professional/technical.
2. TDS under **Section 194C** is more appropriate.
3. Provide copies of **CBDT Circular No. 715** and relevant tribunal rulings if needed.
---
### 📌 TDS Rate Summary:
| Section | Nature of Payment | TDS Rate (FY 2014-15) |
| ------- | --------------------- | ----------------------------- |
| 194C | Contractual Services | 2% (for non-individual payee) |
| 194J | Professional Services | 10% |
---
If you’d like, I can also help you with a draft representation letter to your principal, citing legal references to support your case.
---
## ✅ **Conclusion:**
**TDS should be deducted under Section 194C** (contractual payments) and **not under Section 194J** (professional services).
---
## 🔍 **Rationale:**
### Section 194C – *Applies to Works/Service Contracts*
This section applies when payment is made for:
* Carrying out **any work**
* Including **supply of labor** or services under a contract
* Covers **non-professional, routine commercial or operational activities**
You are:
* Coordinating logistics, permissions, correspondence, crew matters, and invoicing
* Acting as an **agent** or **operations facilitator**
* **Not** rendering any technical or professional expertise that requires qualifications (like legal, accounting, medical, architectural, etc.)
➡️ This falls under the scope of **"work"** under 194C as a **contractual operational service**, especially in the shipping/logistics domain.
---
### Section 194J – *Applies to Professional or Technical Services*
This applies when the service is:
* **Professional** in nature (legal, medical, engineering, accountancy, etc.)
* **Technical consultancy**
* **Managerial or consultancy** (under FTS, especially for non-residents or when substantial intellectual input is involved)
Your services **do not require any professional qualification or certification**, and are not "consultancy" in the 194J sense — they are **executional/coordination-based operational services.**
---
### 🔖 Past CBDT & Tribunal Clarifications:
* **CBDT Circular No. 715 dated 8-8-1995** clarifies that **routine agency or liaison services** are covered under **194C**, not 194J.
* Various tribunals have ruled that unless the services are rendered by professionals (engineers, CAs, doctors, etc.), 194J will not apply.
* **Shipping agency services**, port handling, logistics coordination, etc. have consistently been held to fall under **Section 194C**.
---
## 💡 Suggested Response to Principal:
You can request your principal to reconsider the TDS section by highlighting:
1. **Nature of services** is not professional/technical.
2. TDS under **Section 194C** is more appropriate.
3. Provide copies of **CBDT Circular No. 715** and relevant tribunal rulings if needed.
---
### 📌 TDS Rate Summary:
| Section | Nature of Payment | TDS Rate (FY 2014-15) |
| ------- | --------------------- | ----------------------------- |
| 194C | Contractual Services | 2% (for non-individual payee) |
| 194J | Professional Services | 10% |
---
If you’d like, I can also help you with a draft representation letter to your principal, citing legal references to support your case.
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