TDS apllicability on advance payment of freight.

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Tara Jain (Querist)
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10 April 2020 Mr. A is a supplier and Mr. B is a purchaser. Mr. A supplies goods to Mr. B and pays freight in advance on behalf of Mr. B.
Now the question is who will deduct TDS u/s 194C.
Mr. A who is making payment of freight to transporter on behalf of Mr. B but Mr. will not debit the same to profit & loss account but will debit the amount to party as receivable. or Mr B- who will book the expense but he is not making the payment so when will he make the TDS.

CA Suresh Jain

CA Suresh Jain (Expert)
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10 April 2020 The narration given by you results into a transaction of loan given to B as payment is made to transporter on behalf of him. B should instruct A to pay the amount of transportation charges net of TDS and B should make entry in his books for borrowing the gross amount from A

CA Suresh Jain

CA Suresh Jain (Expert)
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10 April 2020 By mistake mentioned "borrowing the Gross amount from A" instead of "debiting gross amount to transporter i.e. amount paid by A plus TDS applicable'

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