TDS 194C

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This query is : Resolved

Vinod Kumar Mathuria (Querist)

13 September 2010 as per circular u/s 194 C- any payment to non resident shiping comapny is not liable for TDS deduction u/s 194C, My query is that if we are making payment towards IMPORT freight on shipment on FOB basis, it is very clear that we can only import through the clearing farwding agent which is liscenced by the Govt.to do that work. as per act payment made either to the non resident shipping company or the agent/representative of non resident shipping company now how we will clearify the relationship between non resident shipping comapny and agent, either clearing farwerding agent will be treated as agent of non resident shipping company or not of he will be agent of representative of non resident shipping company by default. please give section or circular as ref.

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)

13 September 2010 Yes, sec 194 C will not be applicable, The tax is to be deducted u/s 195.

In case payment is made to agent " the income arises to non resident shipping company due to business connection in india."

If the payment is made to shipping company bankers or supplier( on behalf of shipping co) and ownership of assets is transferred at the time of shipping in abroad, No TDS will be applicable.