TDS

This query is : Resolved

amiya kumar pradhan (Querist)
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18 May 2010 A Pvt Ltd Company giving advance to its staffs to meet various expenses in field on behalf of the company. The employee makes payment to various parties on behalf of the Company from the advance taken. The staff also directly makes payment to the transporter for transportation of goods required for Comany's business operation. Whether TDS U/S 194C will apply in this case? Whether Company can take a stand that no TDS is required asthe "PAYER" is an individual and not the Company ?

Ram Avtar Singh

Ram Avtar Singh (Expert)
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18 May 2010 when TDS booked in company books service tax libility on company. from 1.10.2009 TDS not applicable on Transporter if he mention PAN no. on Gr/Lr.

if transporter not mentioned PAN No. TDS @20% will be deduct by company.

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)
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18 May 2010 No company can not take that stand and tds will be applicable in this case

taxindiaconnect

taxindiaconnect (Expert)
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18 May 2010 For application of provision of TDS one has to see the privity of contract. In this case can it be said that the privity of contract is employee and the transporter. In my opinion, not the privity is between company and the transporter, hence the TDS provisions apply in this case also. No one can just bypass their responsibility by giving advance to the employee and then making payment to the contractor etc where the Tax is to be deducted from the payment. Thus the reply of both the experts is correct.